Commercial insurance might be one of the last things on your mind when you start your own business. However, this is something that all business owners need to consider and get for their business. There are a number of reasons why commercial insurance is vital to your business and something that you have to have.
It Is A Legal Requirement
If you have employees, you are legally obligated to have certain types of insurance. This will include unemployment and disability insurance as well worker’s compensation. Of course, it is important to note that the legal requirements for this insurance will vary depending on the state that your business operates in.
There are also certain industries that require you to have certain types of insurance. Without this insurance, you will not be able to get a bond for the business which can stop you from legally operating. It is important that you find out what the legal requirements are in your location.
If you fail to get commercial insurance for your business, you can face fines, criminal and civil penalties as well as cease and desist orders. The consequences of not having this insurance will generally be more costly than the monthly premiums that you will face.
Say goodbye to lapsed contracts when you integrate a Contract Management Software into your system. Don’t make the mistake of having an insurance-less window. Accidents happen anytime and you don’t know when disaster will strike. It’s best to be prepared anytime. A Contract Management Software does more than just remind you of lapsed contracts. Your company will benefit and given time, you will be able to see both tangible and intangible results.
Not Having To Pay Out Of Pocket
If there is an accident on the business premises or your customers are not happy with the service that you provide, you can be suited. If you have commercial insurance, the insurance company will make the payments to the injured party. However, if you do not have any insurance, you will have to pay for the costs of the lawsuit and any settlement yourself.
There are many businesses that have gone under because of one broken contract, one accident or a single disgruntled employee. This happens when the costs of covering a legal problem such as a lawsuit are greater than the cash flow of the company. To avoid having to pay out of pocket, you should look at getting liability insurance.
Keeping Your Business Up And Running
There are times when your business is affected by something out of your control such as a natural disaster. When this happens, you often have no choice but to stop operating for some time. The problem is that every day your business is not operating correctly, is another day without any income.
This can be crippling for a small business, but commercial insurance will be able to help you. BOP insurance can help you at these times and the insurance company will pay your business the income you would have made while out of operation. Of course, there are some limits on this insurance and the payment will only occur if the loss comes from something that your policy covers. BOP will also compensate your business for normal operating expenses such as utilities and rent which you would have incurred during this time.
P&C insurance is also something that you should look for in order to keep your business running. This will cover the loss of property such as equipment which your business needs to operate. If you do not have this insurance, you will have to pay out of pocket to replace any property which is damaged or lost during the disaster.
Making You Look More Credible
A lot of new business owners do not realize that having insurance can make their business appear more credible. After all, would you want to work with an uninsured company or one that does have some insurance? Having insurance tells your potential business partners and clients that you are a safe company to work with.
The insurance tells them that if anything were to go wrong, they would be covered and not be at a loss. They also know that your business will be able to compensate them adequately should there be any issues. This is something that you cannot offer if you do not have any insurance.
Protecting Your Employees
Your employees are the most valuable asset that your business has. If you do not have good employees, your business will not be able to operate effectively and you will provide poor customer service. This is why you need to consider their well-being when you make decisions about your business.
While the law dictates that you need to have workers compensation insurance, you should also look at disability coverage. This is something that you could charge your employees for a portion of the costs, but it will benefit them if something happens. When you have this insurance, you will not only be protecting your company, you will also protect your employees when they are injured or cannot work.
You Can Cover Acts Of God
Most people know that Acts of God are disasters that insurance companies will generally not cover. However, many people do not realize that you can get commercial insurance coverage that does include this. There are 2 types of commercial insurance that you can get to protect your business from these disasters.
The first is an all-risk policy which covers most events. Of course, there will be some events that are excluded from the coverage, but this will be listed in your insurance policy. Most major natural disaster and Acts of God will be covered by this type of insurance.
The second type is not as all-encompassing and is the peril-specific policy. These policies will list certain risks and only cover them. Some of the common events that are covered by these policies will include floods, fire and certain Acts of God.
Your Contracts May Require This
There are a lot of contracts that your business will enter into which actually require you to have insurance. If you want to rent a building for your business, you generally need to have insurance. The landlord’s insurance will not cover everything and you often have to provide proof of your insurance.
Customer contracts may also require that you be insured before they can be finalized. Of course, this will vary depending on the type of work that you do and the industry you operate in.