Why Is Small Business Insurance Important?

Business insurance plays a pivotal role for any company regardless of its size: from newly founded small and medium sized enterprises (even home-based businesses) to the largest corporations in the world, all of them require some form of business insurance to protect them in the long haul.Why Is Business Insurance Important? Entrepreneurs who have recently started a small business may be a bit reluctant to the idea of taking out a coverage policy due to its price, but not having an insurance policy can be even more damaging for your business, and here you will find out why. One thing is for sure, though: before opting for a business insurance of any kind, it is important to run a risk assessment in order to determine the aspects of your business that need to be covered.

How Can Business Insurance Benefit You As A Business Owner?

The purpose of an insurance policy, generally speaking, is to protect you against the financial loss that may arise as a following of property damage. There are insurance policies for vehicles, homes and even health – however, the business insurance should not be neglected either, because even the smallest financial loss can lead you to bankruptcy, especially if you have just started out in the business industry and you haven’t recorded any profit just yet. This is only one of the reasons why business insurance is so important these days.

On the other hand, if you already have an established business yet you want to take your company to the next level and expand it even further, then you may need to take out a long-term loan to cover all the expenses – a loan that you may not be eligible for unless you have previously taken out a business insurance policy. This insurance serves as an additional safety precaution for lenders, who may refuse to grant you the loan otherwise. The insurance will surely facilitate and speed up the entire process, as it will benefit you on different levels – besides, you will also find it a lot easier to conduct transactions when you are covered by such a policy! Besides, it is surely a lot easier to attract both customers and business partners when your business is insured, given the fact that this will give them a higher sense of security and your business will automatically be more trustworthy.

On the other hand, did you know that in some cases, this type of insurance can actually turn out to be tax deductible? This is a deductible expense, and you basically need to pay no tax for it whatsoever – however, it is important to make sure that the insurance provides optimal coverage for all your business needs, especially since this can turn out to be a strict legal requirement in certain areas.

As a business owner, you have full control over your insurance and over the features that it covers: you can choose the disability insurance feature, you can opt for the personal liability insurance, you can choose to protect your business, your services and your goods against theft and so on. However, the most important part of the coverage is the protection against financial loss related to natural catastrophes, such as floods, fires or hurricanes. If your business has been struck by a natural disaster, not only can this result in massive financial loss, but you may also need to temporarily or even permanently close down the facility, if it is damaged beyond repair – in that case, your business insurance will step in and help you recover financially. However, the terms and conditions can vary greatly depending on the policy you have opted for, this is why it is important to carefully go through all the terms before signing the contract.

As mentioned above, the personal liability insurance is one of the most beneficial ones for business owners. To put it simple, this type of policy offers you extended protection against personal liability, meaning that you cannot be held responsible for any type of damage or injury that may occur at your business site. To give you an example, if a customer or an employee suffers a significant injury while shopping or working in your company or after using any of your products, he or she may sue you and ask for financial compensation – if you, as the business owner, will be held responsible for the injuries, you may need to pay a hefty sum of money that you may not have on the spot. The personal liability insurance will make sure that you get all the money you need to pay without having to sacrifice your home, your car or any other valuable possession. Besides this, you can be sure that your business will be up and running as it will not be affected by any financial loss.

Theft is extremely common, especially amongst thriving and blossoming business that have managed to make a name for themselves in this harsh industry. Your business may be subjected to electronics or money theft – either way, this can be financially damaging especially if you have invested in state of the art equipment, therefore it is normal to want to have it protected by a comprehensive business insurance policy that will not only replace the missing equipment and money, but will also repair all the damage that may arise during the theft. There is nothing more bothersome for a business owner than to see that his newly purchased equipment or that his newly renovated premises have been severely damaged by an intrusion, in spite of having installed a high-quality security system. If you have taken all the necessary safety precautions yet your business was still affected by burglars, your insurance company will cover all the losses and the damage.

Conclusion

Business owners who run thriving companies (and not only) are at risk of financial loss, be it because of theft or natural disaster or because of lawsuits. A comprehensive business policy that offers an extended level of coverage can certainly ensure the continuity of your business and offer you the sense of security you need to go on, knowing that your insurance company will back you up financially, should anything that is out of your control happen to your business.

About Kurt Thomas

Kurt Thomas is an entrepreneur from Melbourne, Australia.