People buy term life insurance to protect their income, especially so if their families are dependent on their income for their survival. Similarly, individuals buy asset insurance such as car insurance and home insurance to secure their assets in the case of any mishap or accident. Business insurance is often overlooked by business owners and entrepreneurs. However, a business is the primary asset of an entrepreneur, and not securing it would pose a great risk to the future of the business.
Business Insurance - Is it only for large companies?
Business insurance has the ability to help businesses in multiple ways. Commercial insurance can eliminate cost risk from the operational and physical side of a business, while liability coverage plans can save the intellectual and financial aspects of the business. Large companies usually have a lot of capital to rely on, and they have access to technology that minimizes risk. Yet these large corporations buy business insurance - because they have a lot of accountability as they are well-known, money-making businesses.
Small businesses are quite different than large corporations in risk appetite. Small business owners are trying to break even in their businesses, pay their employees, and keep the operations running to eventually reach a point of comfortable liquidity. Small businesses and enterprises (SMEs) are either just comfortably above the break-even point, or are progressing towards break-even. They may even be at periodic losses if they are a seasonal kind of a business (such as a small travel business or restaurant in a location that has seasonal crowds). Small businesses lack a large sum of capital assets and have the significantly less financial security to rely on when compared to large corporations. Minor setbacks, mishaps, and accidents can set back the company’s future and probably even erode the entire capital the company possesses. Small companies need business insurance even more than large corporations do. A lawsuit, theft, or bad publicity may completely ruin a small business, whereas a large corporation will use its capital to help ease the situation for them. Let’s talk about a few situations that small businesses absolutely need to be protected against and the kind of business insurance that will protect them.
1. Accidents at work
In goods production industries, accidents can happen at any time. Somebody can get injured due to operating in heat chambers, or working with heavy machinery. Accidents at work or industrial accidents can pose a nightmare for the workers, the work environment, and the business owner. To protect yourself and your business, you must cover your employee’s medical costs as they were injured working in your organization. To have this cost covered but not go out of your pocket, you can get Workers Compensation Insurance. Workers Compensation Insurance will cover the cost of employee injuries at the workplace. Workers' compensation insurance also covers costs for illnesses that occur to employees due to exposure at the workplace (communicable diseases spreading, or allergic reactions due to working in chemical plants).
2. Loss/damage of commercial property
If you are running a transportation business, or a business that uses different machinery, trucks, forklifts - you must buy commercial insurance. In case of an accident or a mishap, your equipment may be ruined, or your commercial vehicles may no longer function. Commercial insurance will protect your business against the cost of replacing commercial property. It will also offer protection against fires and other natural calamities.
3. Loss of Profits/Income
In an event where a chain of losses cause your business to lose its income, or a huge loss occurs which can potentially shut down your business - a Business Pack Insurance can help you sail through the recovery process of your profit margin and your business. This kind of insurance helps you cover operational costs while you get your business back on track. Operation costs may include cost for production, salaries to your employees, operational cost, and cost to recover the losses.
4. Lawsuits
Sometimes, a business may not be able to perform claimed results for the clients and the customer’s equation with the business may get degraded. If a client finds the services or products of a company to be unworthy and feels like they have faced a personal loss because of being in a transaction with that business - the client can file a lawsuit and sue the business or the business owner. In this case, there may be hefty settlement fees that would need to be paid to the client and that could take a huge toll on a small business. Legal cases are expensive - settlement fees, lawyers and other factors can cause the business to go into loss. Professional Indemnity Insurance can protect an individual against such a case and can help you cover legal costs without harming the capital of your business.
There are various kinds of business insurance policies that can protect different aspects surrounding the operations and assets of your business. Small business owners must have business insurance to ensure their business can face and conquer the challenges faced by uncertainty and mishaps. Small business owners can benefit greatly from consulting knowledgeable and trustworthy insurance brokers who will sell them the business insurance that they require and that suits their specific needs.
Our experienced brokers at SKInsure are here to help you get highly customizable policies according to your needs. They make sure you pay for only products that you need and not for any unnecessary inclusions. Contact us!
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