All businesses need insurance. There are plenty of reasons you need business insurance coverage for your business. Insurance isn’t for big companies alone. There are risks involved in all sizes of business, whether large scale or small scale.
Small business owners sometimes overlook the importance of business insurance.
Rather than see it as the necessity that it is, they view it as something only larger corporations need.
In reality, 40 percent of small businesses will face a loss of property or liability that would require them to file an insurance claim in the next ten years.
The recent looting across Nigeria is a reminder of the importance of business insurance. With insurance, you can recover fast from looting, handle damages and business loss.
Here are 5 reasons why you need business insurance:
1. Business Insurance Helps with Lawsuits
Every company or business 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.
In the event of a lawsuit or liability claim, without insurance, your business could fold. One accident. One broken contract. One disgruntled employee, and it’s over. Even if you win the suit, you could go out of business due to the cost of legal defense.
2. Makes You Look Credible
Business insurance shows your prospective clients and customers that you’re a safe bet. If anything goes wrong with the work you do for them, you have a way to compensate.
Insurance builds trust with customers or clients.
3. Protects Your Employees
Asides, the products or services you offer, the equipment you take so much care to maintain or even the brand you struggled for years to build, your most valuable asset is your employees, and it pays to protect them in the event of an accident.
By the way, protecting your employees’ interests is also a good way to protect yours — against lawsuits or liability claims. Your team willingly delivers when they are covered.
Having insurance isn’t just about protecting your business in “doom and gloom” scenarios. It can have the positive benefit of attracting and retaining qualified employees.
4. Contracts May Require It
When it comes to contracts and insurance, several variables come into play.
If you rent or lease your business facility, you may need to carry insurance, as the landlord’s policy may not cover it. If you borrow money to finance buildings, equipment or operations, the loan agreement will likely contain an insurance requirement.
Client contracts may specify that you carry insurance in the event things don’t go as planned.
5. Because You Cannot Predict the Future
No one envisioned the huge #EndSARS protests across Nigeria or how it would end with miscreants looting from any store they could find.
It would be excellent if natural disasters, lawsuits, riots and looting never occurred, but no one can guarantee that such things won’t occur. For that reason alone, it’s best to be insured.
With the proper business insurance, small business owners can achieve peace of mind and focus their attention on what they do best — operating a productive, profitable and personally rewarding business for years to come.