One of the wisest things any business owner can ever do is to protect his business from all the uncertainties that life brings. One never knows what to expect from the future. No one ever thought that a pandemic this devastating would occur. But it did. And a lot of businesses and establishments that weren’t prepared for such a time as this suffered.
Over the past year that we’ve lived in fear of the dreaded coronavirus, we’ve seen countless businesses close shop because they couldn’t sustain their daily operations.
It is during unexpected times like this that business insurance makes all the difference.
What Is Business Insurance?
While some insurance policies cover individuals, like a true-own specialty disability insurance for dentists or something similar, businesses can also enjoy the same protection.
A business insurance coverage keeps businesses protected from suffering any losses brought about by disruptions or events that occur while in operation. It is designed specifically to provide establishments with coverage as protection against property damages, contract disputes, and potential lawsuits.
Different Types of Business Insurance
There are several types of insurance coverage for businesses that owners can choose from. These include:
Business Interruption
Any business that operates in a physical location, like brick-and-mortar shops, will benefit from a business interruption (or continuation) policy. It compensates businesses from any losses suffered caused by any disruption that affects a business’ normal operations, like this pandemic we’re in.
Professional Liability
Professional liability insurance protects businesses from any negligence claims taken against them due to honest mistakes or performance failure.
Property
Property insurance covers the physical structure where the business is housed, its equipment, furniture, inventory, supplies, and signages in the event of theft, storm, or fire. However, this does not include larger-scale disasters like earthquakes and floods. There is a separate policy for these things.
Home-Based Business
Home-based businesses are not covered by homeowner’s insurance. If you run a business at home, ask your insurer about a policy that protects your business.
Product Liability
If you are in the manufacturing business, then you most likely will need product liability insurance to protect your business against lawsuits brought about by faulty products.
Vehicle
Just like personal car insurance, a business vehicle insurance policy covers any vehicle that is used exclusively for the business’ operations. At the very least, there should be insurance for third-party injury as comprehensive auto insurance can take care of accidents.
Why Is It Important?
A responsible business owner recognizes the importance of having his business insured. Here are several legitimate reasons why business people should give insurance a serious thought:
It ensures uninterrupted movement of commerce
When certain disruptions to the normal course of business operations take place, insurance coverage helps keep businesses going, even if it’s just merely in survival mode. Eventually, as things start to normalize, businesses can hopefully recover and regain their momentum.
It is required by lenders
Generally, lenders require insurance before approving any loans. It is their way of protecting their interests. Without any insurance, businesspeople will have a hard time raising capital and funding for their venture.
It is required by some states
Another reason why insurance is important: it is the law.
A couple of examples are auto insurance and worker’s compensation. Auto insurance helps lower risks of loss of life on the road while worker’s compensation is compulsory in most states because it upholds certain rights of employees and laborers.
It gives people peace of mind
Insurance doesn’t just protect assets but it also provides the insured with peace of mind. This allows them to shift certain risks and explore other opportunities.
It ensures business stability
Insurance is the best safety net for any business in case things don’t go as planned. Just as life insurance supports families in the unfortunate event of the loss of the breadwinner, business insurance can help keep the business going in case a piece of equipment gets broken or something terrible happens to the shop.
It protects the small people
When something bad happens to a big player’s business, in most cases they can take the hit because of their size. But if it happens to the small guy, it could mean the end of the line because they are not big enough to stand up to the challenge. Business insurance reduces the risks for the little guy and helps keep them in the game longer which also minimizes the chance of a monopoly occurring.
It is the right thing to do
Lastly, after all is said and done, getting coverage for a business is just the right and responsible thing to do.
So you see, getting an insurance policy for a business is not only practical but wise. A lot of people only look at it as an added expense whereas the proper lens to view it from is as a vehicle for investment protection. It secures your assets and gives you peace of mind amid all the uncertainty.
