When running a business, you are exposed to some risks. An employee can get injured while working, a storm could destroy business property, or a client could file a lawsuit claiming contractual breach. It is essential to protect your business assets by purchasing commercial insurance for these and other reasons. Commercial insurance is among the essential investments you can make for your business. It protects your company from serious financial loss, and it can determine if your business stays afloat or goes under in case of a lawsuit or damages.
1. It is a Requirement of Law
The law requires businesses that have employees to obtain particular types of commercial insurance, such as disability, unemployment, and workers’ compensation, depending on where your business is located. Suppose you fail to acquire the coverage required by law. In that case, you could incur fines, criminal or civil penalties, “cease and desist” orders, and prohibition from public contracts, which could cost you much more than an insurance policy.
2. Protects Your Employees
One commercial insurance coverage required by most states is workers’ compensation insurance. This covers your employees in case they suffer work-related illnesses or injuries. It caters for:
• Missed Wages
• Medical Care
• Funeral Benefits
It is essential to understand that the protection provided by workers’ compensation is different from that offered by unemployment insurance programs.
When searching for jobs, employees consider other things besides the salary. They also look for good benefits, such as health and life insurance. Businesses without any insurance often do not attract and retain the best employees.
3. Protects your Customers
Your commercial insurance also protects your customers if you’ve bought a Business Owner’s Policy (BOP). BOP policies combine business liability and business property coverage into one to protect your business from:
• Product Liability
• Bodily Injury
• Advertising and Personal Injury
• Property Damage
For example, if a customer falls and breaks their leg while at your business premises, your BOP can help cater for their medical costs.
Data breach insurance also falls under this category, and it protects your customers and business in case of a security breach. It can help pay for:
• Liability
• Legal Fees
• Public Relations
• Identity Protection Solutions
4. Builds Business Credibility
Your commercial insurance shows your contractors and customers that you are serious about managing risk. It also helps pass the message that you will provide suitable protection, regardless of the type of accident.
5. Protects Against Natural Disasters
Most states experience natural disasters like lightning, hurricanes, tornados, fires, and flooding. Commercial insurance is essential in protecting your business assets if disaster strikes.
6. Avoid Outcomes of a Lawsuit
If you get sued, you could be out of business quickly without liability insurance. This will affect you even if you win the lawsuit because legal fees can strain your business. Whether the lawsuit is because of a contractual breach or a disgruntled ex-employee, having a lawsuit thrown at you can cost a significant amount of money, which will come from your business. If you have commercial insurance, it will cover all legal costs regarding a business lawsuit.
Which Type of Commercial Insurance is the Best?
To answer this question, you need to sit down with an insurance representative to guide you through available options and choose one that suits your needs. Buy commercial insurance to have peace of mind knowing that any eventuality is taken care of.
