When starting a business, there are a million and one things that you need to think about. Should you launch your product with an event? Does your color scheme work for your sector? Have you remembered to buy all the domains for each iteration of your brand name? There’s a lot to consider of great importance – but perhaps the most important thing is to ensure that you are protected should anything go awry. Business insurance is one of the first things you should acquire – but what is it, why do you need it, and what might happen if you go without?
Business insurance is essentially protection – legally, financially, and personally – from anything that might go wrong with your business. Smaller businesses aren’t able to pay out large sums if they are sued, in the way that big corporations can, and the fallout could result in reputational damage or going out of business. Businesses without insurance could be held liable for any accidents or mishaps their customers have with their products. You could end up paying out of pocket for things such as flooding, fire, or robbery if you don’t have protection, which could end up harming you personally and writing off the business.
It is simple and quick to get business insurance. When you get a quote, you’ll find out how much you should be expected to pay each month. This figure will depend on the type of business and the risk factors involved. For instance, Ned’s Skydiving would pay more than a store selling clothes. The key thing about business insurance today is that it can be fully customized, as many one-size-fits-all insurance policies don’t consider certain factors that you may deem important.
Businesses with insurance may be protected through the very fact that they have a litigator and/or legal advice should anything happen. It helps give customers and other businesses peace of mind if they were to work with you that you take your business and livelihood seriously. Even if the insurance itself never comes in handy, the fact you have it may work to deter people from making false claims or may convince another business that they should hire you in a B2B sense.
Professional insurance can apply to businesses such as accountancy firms, where customers may act on advice given by professionals. If this ends up going wrong, the insurance will protect the accountant from being sued for giving what the client might claim was bad advice. More specific insurance policies, such as commercial auto insurance may also be needed for businesses that require the use of a vehicle – but general liability should be acquired by all businesses.
In the same way you buy travel insurance, home insurance, car insurance, and life insurance, business insurance is mainly there to give you peace of mind. The vast majority of businesses never call upon their insurance, but the consequences of needing it when you don’t have any far outweigh the costs of just buying the cover in the first place. It’s better to have it and not need it than the other way around.