“Business insurance is a waste of time; there are too many other more important things to do when running a business” is what you may think. That is incorrect. Having the proper levels of cover on your business insurance is the most important part of owning a business, for several reasons. Your business could be the target of a lawsuit, business insurance is often required by law, to protect your business against damages, and to protect the contents of your business are four main reasons business insurance is essential.
The threat of lawsuits comes from many different parts of doing business. Having adequate business insurance is essential to protect your business from closure in the event of an accident. The three main types of business insurance to protect your business from lawsuits include public liability, employer liability, and product liability. Public liability business insurance protects your business in case a member of the public becomes injured or has their property damaged as a result of your business operations. Employer liability protects your business if an employee becomes injured in the course of performing their duties. Product liability business insurance protects your business if a customer becomes injured or has their property damaged due to a defective product purchased from your shop. Each of these lawsuits could result in large awards and could mean your business has to close in order to pay the fines.
A second reason business insurance is essential is because it is often required by law. Employer’s liability insurance is required by law to operate a business. Also, it is frequently required to show proof of adequate public liability business insurance to do work for local authorities, contractors, and sometimes even for individual clients.
Business insurance is also important to protect against damage to your business. For instance, to protect your business from a fire, flood, explosion, riot, or storm. What would happen if your business was devastated by a large fire? This event could permanently close your business, without adequate business insurance. The cost of rebuilding your business could be prohibitive, and you risk losing your customers to your competition while working to rebuild. A reduced customer base and the expense of rebuilding your business could spell the end of your business. Having sufficient business insurance will protect your business in the event of an emergency.
A fourth reason business insurance is crucial is to protect the contents of your business. Theft and electrical or mechanical breakdown could be a disaster. Machinery and other equipment is costly to replace and when you add the other contents of your business, like the products you are selling, a theft or breakdown could be the end of your business.
Protecting your business with business insurance is a critical step. Your business needs cover from lawsuits, to stay legally compliant, to protect from damages, and to protect the contents of your business. Without the proper levels of cover from your business insurance, your business could end up closed for good.