Operating a business without the proper insurance is like sailing in a boat without an anchor. While it might be okay while the water is calm and level, any sort of turbulence will put you in a rough situation and may leave you stranded or damaged on the other side, on the verge of sinking. Many small businesses opt into running with less than optimal coverage, which can leave you in just as much trouble as our poor sailors in their anchorless boat.
There is a wide range of factors that can negatively impact your business should disaster strike. Anything from physical disability to lawsuits to natural disasters can impinge upon your ability to conduct your business normally. It is for this reason that you need to plan ahead accordingly and be ready to turn as many unexpected incidences into those you are properly prepared for.
The following are the most common types of insurance an entrepreneur might need for their business, and why they are important to ensure everything runs as smoothly as possible.
Life And Disability Insurance
This is a variety of insurance that protects the employees in particular, in either case, that loss of life or injury occurs. Life insurance is fairly common, and most entrepreneurs do their due diligence in obtaining life insurance, but often neglect additional policies, including disability insurance. There is a much greater likelihood that you or your employees will be injured rather than dying prematurely.
Although these are personal policies and not business policies, they are still extremely important parts of any business. These options are not always made available by all insurance providers, as some focus exclusively on business insurance. Before considering an insurance firm, it’s important to know if they offer both business and personal insurance options.
Naturally, it’s quite easy to understand why this might be important. Losing yourself or your employees either permanently or for extended periods can really set back your business and the employees themselves.
Property And Liability Insurance
We covered damage and loss with regards to people, but you will likely need similar coverage when it comes to business property. Both property insurance and general liability insurance are usually found in a single package and are frequently a requirement when looking to obtain a business loan.
Property insurance is coverage for assets related to the business itself, such as the loss of a building or its contents, like company inventory, materials, equipment, or furniture. General liability insurance, on the other hand, covers damage or injury caused by a company or employee negligence. It may also include damage that may occur as a direct result of your product or services, depending on the policy.
Losing parts of your business can potentially set you back large sums of money for expensive assets. Without insurance, you’re on the hook for all of these items, potentially all at once, which can mean an instant bankruptcy and closing your doors.
Business Interruption Insurance
Sure, the costs of replacing damaged property are high, but that isn’t everything you are losing when your business is forced to shut down. You lose all the profits you could be making should the catastrophe not have occurred, and without business interruption insurance, you won’t recoup those costs either.
It’s important to not only protect your business property but your profits, too.
Combined Commercial Insurance
This type of insurance is a plan that includes property, liability, and business interruption insurance policies, and may include others like supplemental insurance for goods that are “in-transit” or currently being shipped. This type of plan is a common catch-all for business and is the usual type of comprehensive plan you should receive for business insurance.
If you own a company car, you’re going to need auto insurance, too. Some business owners run under the belief that the company car falls under the banner of property insurance, but this is not the case. Property insurance covers the building and its contents in the case of a catastrophe, whereas the company car is usually involved in an accident that has nothing to do with the rest of the business. As a result, it requires separate coverage.
It stands to reason that you should protect your company car just the same as you would any other part of your business. It can be just as important to its proper functioning as any other part of the business and can be very costly to replace or repair in the event of an accident.
Professional Liability Insurance
Mistakes happen, everyone is human. But in the case where errors or omissions have potentially large ramifications attached to them, it is often recommended for some professionals to consider professional liability insurance to protect them against such mistakes. This can give them some peace of mind that should a catastrophic mistake happen, it’s not the end of the world.
Proper business insurance can mean the difference between weathering the storm and sinking to the bottom. Too many people believe that the chances are too low for catastrophe to happen to them, and they will often go under as a result. Take the proper measures to protect you and your employees, and potentially save your business from a costly restart – or never restarting at all.
Colin Hegarty is a content writer for BreezeMaxWeb that helps businesses showcase their brand through enticing copy. When he’s not working, you can find him playing net in a local beer league or biking around the city.