If you’re running a business, it’s important to take the time to understand all of your business insurance options. But with so many different types of insurance available, how do you know which one is right for your needs? The most important thing to understand about business insurance is exactly what it can do for you. Like most types of insurance, it can be easy to put it at the bottom of your priority list. But when you need it, you’ll be thankful you’ve found the best cover.
Here are just some of the benefits you receive when taking out insurance for your business.
It protects your business in case of a catastrophe
Unfortunately, bad things happen. And when they do, you’ll be glad you had the appropriate insurance. There are so many different issues that can plague a business, but the more severe ones can cause untold damage. Some of these catastrophes include:
- Natural disasters: Flooding, storm damage, high winds and heavy rainfall, lightning, fires – the list goes on. If your business is affected by these, insurance will help get you back on your feet.
- Damage to the premises: A business can be damaged by many things other than natural disasters. It could be vandalism, damage caused by customers or even issues with plumbing or wiring.
- Theft and loss: While not always catastrophic, theft is a major concern for many businesses. In the event of after-hours theft, it’s likely the premises will be damaged too, so insurance gives you great peace of mind.
Disasters and other major events can result in serious implications, such as loss of income during temporary closure or even full relocation. We’ll touch on these specifically as we go.
Ensures your staff can still be paid in the event of downtime
As we touched on above, some business incidents can be so severe that they cause the business to close. This might be temporary, but if you have staff members relying on a wage and they can’t work, it’s a bad situation for everybody. Employees suffer through a lack of wages, and businesses suffer because those employees may need to look elsewhere.
Business insurance can provide great assistance to get the business back up and running, which may allow employers to cover wage costs during that time.
Protection for staff members
Another common type of business insurance that all employers need to have is Worker’s Compensation insurance. It protects both the business and the employee in the event of a workplace accident. If one of your staff members is injured in the course of their normal duties, they may not be able to attend work for a period. They may also have medical expenses.
Workers’ compensation protects both parties by contributing to the employee’s lost wages. This is hugely beneficial, because it means the business can potentially hire a temporary replacement to ensure continuity, and they aren’t paying two wages for the same job.
In addition, workers’ compensation also covers medical expenses for the staff member, which eases their burden during a difficult time. The idea is to provide a framework to help staff members recover and return to work when able, and this is good for both sides.
Liability for customer accidents
One of the biggest risks for small businesses is the liability for customer accidents. If a customer has an accident on your premises, you could be held responsible for their injuries. In certain cases, this could cost a business millions of dollars.
Naturally, you’ll want to take all possible precautions to avoid customer accidents. But if one does occur, having public liability insurance for your business gives you the protection you need.
Compliance with industry regulations
Compliance with industry regulations is one of the most important benefits of business insurance. Industry regulations vary depending on the type of business, but they’re generally designed to protect consumers and ensure that companies operate safely and responsibly.
Business insurance also helps companies comply with federal laws. There are regulations that determine which businesses must have workers’ compensation insurance, for example. Or a business hosting a public event may not be given permits without providing evidence of public liability cover.
Assistance with relocation expenses
If your company needs to move due to a disaster, the cost of relocating will be covered by your policy and can be tax-deductible. The types of relocation expenses covered include finding new premises, moving costs and new equipment that is needed for day-to-day operations.
This is certainly quite rare, but in the instance of a natural disaster completely destroying a business, it can be extremely valuable. If there is no reasonable expectation that your business can re-open on the same site, you’ll be covered for the costs of moving.
Improves customer confidence
As a business owner, you’re already aware of the importance of maintaining a good reputation. One way to do that is to hold appropriate insurance coverage and don’t be afraid to show it. Your website, for example, is a great place to reassure customers that you have all the insurance necessary to make you safe to deal with.
You might say that nobody looks for what type of insurance a company has, but that’s not true. In fact, many businesses proudly advertise their insurance status, particularly in service industries such as tradespeople.
Business insurance is tax-deductible
As a business owner, it’s completely normal to want to keep costs down. So, paying for insurance never really makes people happy. However, business insurance is a genuine business expense, which means it is tax deductible. Your annual premiums essentially offset some of your income for the year, so there is at least some short-term financial benefit. Naturally, the real financial benefit comes in the event of an incident.
Peace of mind
Finally, what’s more important than peace of mind? Running a business is stressful, so you don’t need anything else to worry about. Paying for insurance can feel frustrating, but you appreciate it when you need it. It’s just like life insurance or funeral insurance which takes the stress away from grieving loved ones. Business insurance essentially means that you don’t need to stress about the impacts of certain issues like theft or natural disasters.
Overall, business insurance provides extremely valuable protection for business owners. Importantly, it also frees you up to focus on more important things, like growing your business even further.
