7 Ways Business Insurance Can Save Your Company

As a business owner, you wear a lot of hats. You probably are in charge of making final decisions on just about anything of relevance to run your business, and decision fatigue can quickly sap your energy to make even one more decision.

While you may not want to think about getting business insurance until you actually need it, putting off this critical decision might cost you if you procrastinate.

In truth, experienced entrepreneurs know that business insurance is just as vital as a business plan, a marketing strategy, or product development in ensuring the longevity and health of a business. While the main purpose of business insurance is to protect the stability of a business in difficult or disastrous times, here are seven other ways that business insurance delivers security and preserves your business:

1. Business insurance reduces financial risks

Starting a business can feel a lot like jumping off a cliff. Will my parachute open? Will the wind buoy me or smash me into the bluff? Certain types of business insurance like general liability insurance provide protection from the types of commonplace accidents that happen every day.

General liability protects your company in case of lawsuits for damages that are deemed the responsibility of your company. If your employee drops a large apparatus that takes out a fire hydrant, which floods a house, your company could be on the hook for repairs and other costs. General liability insurance protects your company from these risks.

2. It protects property

If your business depends on equipment or inventory to keep humming through everyday demands, your company could come to a screeching halt if something were to befall those vital resources. Theft is only part of what should concern you, as fire or other disasters can occur at any business in any location.

Once you are insured against property losses, you can have confidence that help will be on its way. If you have years of savings invested in your business, insurance coverage can help preserve your company for future generations, in spite of any threatening disaster life throws your way.

3. It helps you care for employees

While you as the business owner are necessary to keep your business flowing, your employees also contribute to the vitality of your business. In fact, employees can become a part of the work family, and like family, you’ll want them to be safeguarded.

There are several types of insurance that protect employees in times of distress like workers’ compensation or group health insurance. In either case, you’ll be able to provide employees with coverage that helps them return to work more quickly and in better health without putting a strain on your bank account.

Other Articles From AllBusiness.com:

• The Complete 35-Step Guide for Entrepreneurs Starting a Business
• 25 Frequently Asked Questions on Starting a Business
• 50 Questions Angel Investors Will Ask Entrepreneurs
• 17 Key Lessons for Entrepreneurs Starting A Business

4. You can lessen the financial burden in the aftermath of a disaster

What qualifies as a disaster? Anything that threatens the existence of your company. Depending on the work you do, it could be a claim that your services harmed a client, that your firm didn’t complete its contracted services, or an unexpected event that necessitates the relocation of your business.

In the first two cases, professional liability insurance will save your bacon, and in the third case, business interruption insurance can help your company weather the storm--literally or figuratively.

5. It safeguards assets

In the event that a judgment is rendered against your firm, certain types of insurance can provide financial protection and pay damages and costs on behalf of your company, protecting the income generated by your concern. In the event that your company is a sole proprietorship, your personal assets such as property or college savings accounts won’t need to be sacrificed to remit payment.

6. It helps you support your community

Even if you don’t have a retail location, you may have clients or service people visit your place of business. In the event that a decorative rug or a misplaced box causes injury to your guest, you’ll be happy that you have the appropriate business insurance in place to protect them and cover you. By responsibly acquiring this coverage, your actions create a protective umbrella that shields your community.

7. It helps you to plan for the future with confidence

There are few guarantees in life, but with appropriate planning and management, and using established tools like insurance, you prepare a substantial plan for the future and can have reasonable confidence that your strategy will bear fruit.

Insurance removes some of the uncertainty so that business owners can direct the bulk of their energy toward building their businesses rather than devising strategies to respond to unlikely events. When business owners buy the appropriate insurance, they invest in the longevity and continuity of their enterprises--and that makes sense.