No business owner enjoys paying for insurance, but not having it can lead to severe consequences. Failing to have adequate business cover can result in unexpected expenses, penalties, and liability claims. For that reason, companies must know what insurance they need and take out cover to protect their business and employees. Here are the top reasons why businesses need insurance.
Errors and omissions
Your employees are only human, and it is natural for them to make mistakes from time to time. That said, even a minor error can cause significant problems for your business. A simple error can lead to a negligence claim and leave you facing huge costs. Without insurance cover, you would be personally responsible for expenses which could result in your company being forced to close. Fortunately, there is an excellent selection of E&O insurance plans that can cover your business in the event of errors and omissions. Having insurance cover means you can have peace of mind knowing that you won’t be hit with unexpected expenses if accidents and business mistakes do happen.
Many companies use vehicles while conducting business. For example, your staff may use a company car to attend client meetings or to travel between various work locations. If an employee has an accident while traveling for business, then your company may be liable for any physical damage and personal injuries caused. With that in mind, you must take out commercial auto cover if you or your employees use your vehicles for business purposes. Compare different commercial auto insurance providers and make sure that you take out a policy that provides the correct level of cover. You can refer to articles for more advice on commercial auto coverage for your business.
Imagine that a client or customer visits your workplace and has an accident — i.e. trips on an uncovered wire or slips in spilled liquid. In these situations, your business is likely to be liable for any injuries sustained as well as any financial losses caused by the accident. Business liability cover can be taken out to protect the finances of your company against third-party claims and lawsuits.
According to Investopedia, the cost of business liability coverage is typically determined by the perceived level of risk. For example, an industrial business may have to pay more for liability coverage as they deal with dangerous machinery like forklifts and warehouse vehicles. However, office environments are perceived as lower risk meaning that insurance premiums are generally cheaper.
Business insurance can be expensive, but it is essential to protect your business and staff. Failing to take out sufficient cover can have serious consequences and may even result in your company being forced to close. For that reason, you must check what insurance your business needs and take out policies to cover your company in the above situations. Having business insurance can also boost the credibility and image of your company by showing that you are managing risks responsibly.