What is one reason why small businesses need insurance?
To help small businesses understand all the important factors in obtaining insurance, we asked small business owners and business professionals this question for their best insights. From having the flexibility to fit your business needs to allowing you to build trust, there are several reasons why insurance is important for small businesses that may help you better gain a better perspective and ensure the longevity of your business for years to come.
Here are nine reasons why insurance is important for small business:
- Creates a Safeguard on Financial Risks
- Gets Contracts Completed
- Flexible to Fit Your Business Needs
- Retains and Attracts Employees
- Required by Law
- Provides Protect for Your Employees
- Helps in Case of Lawsuits
- Allows You to Build Trust
- Makes Your Business Credible
Creates a Safeguard on Financial Risks
Insurance is an important risk management tool. It is one of the best ways to safeguard your business from financial risks such as loss of plant, property and equipment, inventory and other valuable assets. Most businesses also have to provide insurance for their employees. Offering a good health insurance package to your full-time staff can help to make your business more competitive in terms of attracting the best candidates over time.
Brandon K. Berglund, Berglund Insurance
Gets Contracts Completed
The first time I took out a large insurance policy was to satisfy the terms of a prospective client contract. Not only did the insurance policy help us land the client, but it helped us land other clients that mirrored the persona of the first. Getting sales and closing deals probably shouldn’t be the primary motivation to take out an insurance policy at a small business. But, it can certainly provide some financing to secure coverages that benefit business in more ways than one.
Brett Farmiloe, Markitors
Flexible to Fit Your Business Needs
When your business relies on something like sustainable crops, damage to raw materials or disruptions to the supply chain can bring business to a halt. So, it is critical to your financial plan to consider environmental risks like drought, freeze, and disease. And crop insurance can protect your business against revenue losses that occur during that crop year. In addition, having crop insurance can help your sustainable farm in its recovery from volatile market fluctuations.
Jared Pobre, Caldera + Lab
Retains and Attracts Employees
Having insurance isn’t only about protecting your business in unfavorable situations, but also about attracting and retaining qualified employees. If your business does not offer these perks, it is likely candidates will look for a job elsewhere and you may lose an exceptional employee.
Maegan Griffin, Skin Pharm
Required by Law
First and foremost, most states require business insurance by law. It’s not an option—it’s a legal necessity. Still, even if you’re not legally required to purchase insurance, why would you want to risk being sued by an injured customer, paying out of pocket for fire damage, or being liable for stolen client information? These things are all out of your control, and that’s precisely why they’re covered by business insurance.
Vincent Bradley, Proper Wild
Provides Protection for Your Employees
Having a business insurance policy protects not only your company but also your employees. Workers compensation insurance ensures that in the event of an on-the-job accident the employee will receive benefits such as medical care, missed wages, and funeral benefits.
John Levisay, The Pro’s Closet
Helps in Case of Lawsuits
While it’s not a well known fact, business insurance can help with lawsuits. Every company small or big can face a lawsuit at some point in time. Business insurance can actually help cover the costs. Lawsuits can come from customers, injured employees, and other avenues. Your insurance will help to cover the costs of legal fees and save you from financial ruin.
Ajay Mehta, Birthdate Co.
Allows You to Build Trust
Having insurance enhances your credibility. The benefits of business insurance go further than protecting your business from risk. Having insurance shows your prospective clients and contractors that you are a safe bet. It builds trust that if anything happens to the work you’re completing; you have a way to compensate.
Nina Jensen, 8×8
Makes Your Business Credible
As a small business owner, your company requires insurance mainly as a show of credibility. Also, it makes your company appear credible and trustworthy in the eyes of the government. Business liability insurance is one of the foremost policies expected of small businesses when bidding on government contracts. This insurance policy provides coverage for business owners that may likely face formal lawsuits and any direct financial liability.
Adam Garcia, The Stock Dork
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