The operation of any business comes with inherent risk. There could be many things that could go wrong. Even a small accident can lead to a big lawsuit and become a disaster for the business. Not only the business could come under threat, but other related parties, suppliers, distributors, employees, and lenders come into trouble.
It is extremely vital to consult with an insurance broker to find out if your business needs commercial insurance. The broker should also be able to guide you on what type and limits of commercial insurance are required by the state and what is recommended for your specific business needs. Regardless of the size of the business, in most cases, commercial insurance is useful. Here are six reasons why you must think about getting a commercial insurance.
1) Keeps business up and running
Commercial insurance can help commerce moving in an unexpected situation such as an accident, natural disaster, or damage to property. The insurance can provide some relief and keep it from going under. There are different features of commercial insurance, depending on what you choose. For example, some companies choose to insure lost income while others only get protection to pay employees.
2) Contracts may require commercial insurance
Certain contracts such as loans, supplier-distributor agreement, land lease, may require a business to have commercial insurance. Typically, if there is a risk of personal injury or property damage, there will be a need to be protected through insurance. In some cases, contracts that involve technology license require insurance as the business owner wants protection in case there is infringement claim or the technology malfunctions.
3) Increases your credibility as a business
Having commercial insurance offers a more professional and trustworthy image of your business. In the modern-day business, trust is the currency of the economy. This is an invaluable advantage of commercial insurance as it can lead to an increase in sales, strategic partnerships, market penetration, and other positive business outcomes. It shows your potential customers, employees, and partners that your business is a safe bet. In case anything goes wrong with your business, they will be protected. It also shows that your business takes risk management seriously.
4) Required by law in some states
Some states require businesses to have a certain limit on commercial insurance. Failure to carry commercial insurance can result in fines, civil or criminal penalties, and other legal consequences. If you are operating in one of these states, not having commercial insurance, could cost you much more than the price of insurance premium.
5) Protects your employees
General liability will cover for accidents caused by the employee to property or bodily injury to others. Worker compensation coverage will offer cover if the employee has had an accident leading to injury at the workplace. There are times when employees could make mistakes, whether intentional or not, these mistakes can lead to liability issues for the business.
A mistake could be impacting the clients, and the lawsuit could come from the client or your employee. The client could also sue your employee directly. Not only would commercial insurance protect your business, but it will also offer protection to your employees.
6) Peace of mind
All the above reasons for having commercial insurance kick in when something goes wrong. There is always a chance of that happening. The one advantage of having commercial insurance even if nothing goes wrong is peace of mind. Running a business requires tremendous focus and hard work. Commercial insurance can provide the peace of mind that is needed for you to focus on the business and not worry about what would happen if something goes wrong.