Insurance 101 for new business owners
If you want to start a small business, you should not be afraid to take a few risks. In many cases, taking a risk is the only way that you can truly achieve success. However, this doesn't mean that you should take risks for no reason. In fact, it is smart to reduce risks wherever and however possible. This is where business insurance comes into play. Read this article to learn more about the Insurance 101 for new business owners.
Is business insurance required?
Business insurance is absolutely a necessity and not a luxury. This is particularly true if you have employees. Disability insurance and workers compensation insurance are examples of insurance policies that may be required by law if you have employees. If you have a company car, you may be required to have auto insurance. In other cases, insurance coverage can be necessary to get a business loan, local business license, supplier or customer contract, or lease.
In most cases, there are no regulations, laws, or rules that require that business owners make smart choices to protect their business. Due to this, about 40 percent of all small businesses don't possess insurance.
What's the risk?
Many small businesses don't have insurance due to the cost. These businesses haven't taken into consideration what the cost of not having insurance might be. The truth is that all businesses potentially face risks that could be devastating financially without insurance protection. Of course, the business risks depend on the type of business. However, there exists no business that is 100 percent immune to risks. Some examples of risks include employee accidents, theft by an employee, malpractice or negligence, data breaches, death of a key executive or business partner, and more.
If you don't have the correct insurance coverage, any of these situations could end up ruining your business or jeopardizing your assets. The last thing you want is to close your business as quickly as you started it.