In 2017, about 75% of businesses in the US didn’t have adequate insurance coverage, and about 40% of small business owners didn’t care to get any insurance at all. This was, of course, dangerous. In essence, most of these small businesses could have shut shop if legal issues arose. In fact, in some states, operating without some insurance is even illegal. If you have more than a certain number of employees in your company, no matter how small the business is, you’ve got to have some kind of coverage for workers’ compensation, disability benefits, and unemployment. Falling short can land you in court, a battle you may win, but still, lose all your money in the process.
Small business insurance extends beyond just covering for the damage to your commercial property and business equipment from disasters, like storms, fire, theft, hurricanes, and more. It protects your reputation, your resources, and of course, your employees from unnecessary hazards and health issues. It also saves your income in some cases.
Let’s look at what small business insurance can do for you:
It increases your reliability
Small business insurance covers any damage to the property because of natural disasters and unfortunate incidents, like fire and thefts. This assures commercial building owners of your ability to protect the premises they rent to you. In other words, it increases your reliability. In so many ways, the term ‘fully-insured’ ring so well with clients/customers. Even possible business partners and vendors will be convinced that you can handle a financial mishap or a crisis if you have insurance.
It protects your cash flow
If there’s a disaster, and you’re unable to operate your business for a long time, the business interruption insurance could cover for your losses. However, the disaster should be included in the policy for you to raise a claim and it should directly influence your business operations, like major damage to the building or the breakdown of equipment leading to the temporary suspension of all business operations. The business interruption insurance will cover the expenses for the restoration period, in which you need to complete the necessary repairs or replacements. Some insurers will give you an extension to the restoration period though, in case the damage is severe. If you opt for additional endorsements in the policy, you may get extra coverage to reduce the losses incurred.
It helps meet liabilities
If someone gets injured on the business premises, who do you think should be responsible? Generally, it’s upon the building owner to pay for the liability claims that the injured may raise. However, if the injured is your customer/client or any stakeholder, the small business insurance could come to your rescue. It will give you the general liability coverage to handle such issues with ease by paying for the medical expenses of the injured person, as well as covering legal expenses, in case s/he takes any legal action against you.
It protects your employees
As mentioned earlier, many states don’t even allow businesses to function without worker’s compensation insurance, a type of small business insurance. And there’s a reason for it. Consider what would happen if any of your employees get injured in the workplace because of some faulty equipment, underserviced machinery, or anything else that you’re held responsible for? if the injury is serious, which may even lead to disability and ruin the entire life of that employee, what will you do? Of course, you should seek the necessary help from your worker’s compensation insurance coverage.
It will help you pay for the medical expenses of the injured employee and also give enough compensation to take care of the financial expenses for the recovery period. This apart, it can also help you pay for the vocational rehabilitation costs and death costs, like for the funeral, if the person dies. In many companies, employees may refuse to join, if the business doesn’t have a well-defined worker’s compensation insurance.
It covers for thefts and burglaries
About 20% of all small business claims arise from burglaries and thefts at the property. You can opt for a BOP (Business Owner’s Policy) to protect your business and its assets from such instances. It combines the property insurance and general liability protection to form a single package, available at a less expensive rate than the two separately. Besides thefts, it also protects your business equipment and assets from unfortunate incidents, like fire damages, breakdown, spoilage, and so on.
So you see how the small business insurance goes way beyond the general concept of damage management? It helps you concentrate on taking your small business up the ladder of success and leave the worrying to the insurance policy.