Creating a new business is one of the most difficult endeavors a person can take on. The possibility of failure at every step of the process is very real. The landscape of almost every city and every market is strewn with a plethora of failed businesses. One of the only ways to protect your company is to purchase insurance coverage. Below are six reasons why.
There Are Different Kinds of Insurance Coverage for Different Business Needs
You may be concerned that business insurance coverage may not be adequate enough to protect you from different difficulties your company may encounter. However, you should be aware that insurance coverage is available for nearly every business need. Northeast Insurance Agency, for example, provides property insurance, general liability insurance, workers’ compensation insurance and commercial automobile insurance to businesses.
Certain Kinds of Insurance Are Mandated by the Law
It’s smart to have insurance coverage. In fact, in certain cases, having that coverage is mandated by the law. As the Small Business Administration states, every employer is required by the government to have disability insurance, workers’ compensation insurance, and unemployment insurance.
Lawsuits Could Put You out of Business
One thing that can certainly kill a business is a significant lawsuit. Thankfully, you can purchase liability insurance to protect against this threat. Things as common as disgruntled employees can lead to massive lawsuits.
It Can Protect You from Natural Disasters
Natural disasters are also significant threats to businesses. Things like floods, tornadoes, hurricanes, earthquakes and more can destroy all the products you have in stock. Without insurance to help pay for the expense, you may never be able to get out of the red.
Homeowners Insurance Is Not Adequate
One big mistake small business owners make is assuming their homeowner’s insurance will protect them from losses to their home business. However, this is not true at all. Merchandise or equipment used for the business, for example, will not be covered.
Business Relationships May Require It
Something else you should be aware of is the fact that many business contracts require your business to be insured against different risks. Business loans often require the business to be insured. Client contracts may also have requirements for insurance coverage to protect their investments.
These are just a few of the reasons why a business has to invest in insurance. Overall, insurance isn’t really optional in many cases. It’s required for your company to survive for the long term.