Entrepreneurs have a mindset suited for risk-taking, but accidents and unexpected expenses are still part of the job. Business insurance is the best way to guard against unnecessary losses and allow a startup to continue to grow.
Every business owner should expect the unexpected. Anything can happen as they grow their business, as taking risks is something they do often. But small or large, they stand to lose plenty if they do not have backup plans in store and insurance to cover unexpected expenditures.
A business insurance policy can help a business owner recover from a devastating mishap or event. Fortunately, business insurance covers small business owners, even those who only treat the business as a side-job.
Here are some scenarios where you need business insurance.
Scenario #1. Protection Against Losses
A business can be open to and liable for an array of losses, ranging from environmental hazards like a fire to workplace and customer injuries. In fact, it is not uncommon for an unexpected event to wipe out a startup to the extent of permanent closure.
There are multiple types of business insurance and the most common include those that protect against workplace accidents and property damage. However, there are some types of losses that no insurance will cover, which may include losses resulting from war, contamination, or government seizure.
Scenario #2. Legal Protection
If your startup works with other legal entities, a client might sue you to absolve themselves of liability. Furthermore, any breach of contract can lead to litigation if other conflict resolution attempts do not pan out. Startups can also be liable for customers who have an accident on the premises.
More than just legal bills, a court can easily assess enough damage to put your company into bankruptcy protection, but not if you have the types of business insurance that cover legal fees and damages.
Scenario #3. Leasing Property or Equipment
Once a startup outgrows the garage or home office, most property leases will require the company to have at least business liability insurance.
If the business has insurance, new clauses might have to be added to the policy if you want to lease new office space and secure room for growth. In this case, leasing expensive new equipment to go with the new area will also require insurance coverage to protect both the lessor and the lessee.
Scenario #4. Fair Participation
Public gatherings that promote businesses, such as job fairs, trade shows, and conventions, also rely on participants having sufficient insurance coverage. Without it, a startup might not even be able to attend an event, which can severely limit its scope and client reach.
Since these gatherings are an excellent opportunity to promote a brand and ensure visibility on the local stage, it would be a shame to miss out for not having insurance.
Peace of Mind
Newly established businesses often struggle as is, so insurance costs can seemingly outweigh the potential risks that come with insufficient coverage. However, insurance is one of those things that you may think you don’t need until you really need it..
The truth is that business insurance protects against unexpected losses and can give employees the security needed to keep working their hardest at making the brand’s vision come true.