Top 10 Reasons You Need Business Insurance
Why Do Businesses Need Business Insurance?
If you’re asking yourself, “why do businesses need insurance?” The answer is: because accidents can happen at any time. And when they do, business insurance helps pay for damages you’d otherwise have to cover out-of-pocket.
There are plenty of reasons you need business insurance coverage for your company. Having it helps:
- Save you time, money and stress
- Protect your business from damages
- Provide benefits to your employees
1. Business Insurance Is Required By Law
Most states require small business insurance. However, even if yours doesn’t, you shouldn’t view it as an unnecessary expense. Without it, your business may face financial losses if:
- A customer sues you after getting hurt at your place of business.
- A fire destroys your building or inventory.
- A computer with your clients’ personal information on it is stolen.
2. Business Insurance Protects Your Employees
One business insurance coverage that most states require is workers’ compensation insurance.* If your employees suffer work-related injuries or illnesses, it provides benefits like:
- Medical care
- Missed wages
- Funeral benefits
It’s important to know that workers’ compensation offers different protection than unemployment insurance programs.1
3. Business Insurance Protects Your Customers
Your business insurance can also help cover your customers if you have a Business Owner’s Policy (BOP). These BOP policies combine business property and business liability coverage into one to help protect your business from:
- Property damage
- Personal and advertising injury
- Bodily injury
- Product liability
For instance, if one of your customers’ slips, breaks their leg and needs to go to the hospital, your BOP can help pay for their medical costs.
There is also data breach insurance to help protect your business and customers if a security breach occurs. This coverage can help pay for:
- Identity protection solutions
- Public relations
- Legal fees
- Liability
4. Business Insurance Builds Credibility
Your business insurance does more than protect your business. Having the right policies shows your customers and contractors that you take managing risk seriously. It also helps communicate to everyone that you’ll provide the right protection, no matter what accident occurs.
5. Contracts May Require Business Insurance
Businesses like yours make contracts all the time. So, it’s important to be aware that many contracts require insurance protection. Some examples include:
- Renting a building from your landlord
- Borrowing money to finance goods
- Loan agreements
- Clients agreements
6. Business Insurance Can Help Recruit and Retain Employees
Employees look for more than just a salary as they search for jobs. They’re also looking for the right benefits, like life and health insurance. Businesses without insurance often miss out on attracting and retaining the best employees.
7. Business Insurance Protects Management
Your management liability insurance can help cover the owner, CEO or “key person” that runs your business from costly lawsuits. Management liability insurance can help protect those working for nonprofit organizations and publically traded companies. In most cases, you can add this type of insurance to your BOP policy.
8. Business Insurance Protects Against Natural Disasters
Most states suffer from various natural disasters, like:
- Flooding
- Fires
- Tornados
- Hurricanes
- Lightning
This insurance is important for protecting your business’ assets and the possessions inside it if a disaster strikes. You can also learn about our flood insurance to help protect your business from floodwater damage.
9. Business Insurance Helps with Lawsuits
Every company can get sued and face legal fees. One of the reasons you need business insurance is to help cover the costs. For example, if you have an injured employee that sues you, your workers’ compensation insurance can help pay the legal fees. And, if that injured worker ends up with a disability, workers’ compensation can act as disability insurance and provide them with benefits.
10. Business Insurance Offers Peace of Mind
One question we’re often asked is, “what insurance do I need for my business?” Our representatives help answer this every day. They can guide you through each of our insurance coverages and decide which property and casualty insurance policies fit your needs.