Seriously, do you really need insurance for your business? Is it absolutely necessary or just another added cost? There are all sorts of confusing tax laws surrounding business insurance as well – is it tax-deductible or not?
Don’t worry, we aren’t about to take a deep dive into the world of commercial insurance and taxes! However, we will answer the original question: do you need to insure your business? In short…yes, you absolutely must have some sort of business insurance. If anything, you’ll need multiple types offering different coverage.
Why? Let’s find out…
Boost your credibility
Certain businesses will not be able to find customers without insurance. If you provide services for clients, particularly those involving physical work, you need to have some type of insurance in place.
How come? Because this insurance protects both you and the customer if something goes wrong. Let’s say you have a construction business and you build an extension. If the work collapses or there are other issues, your insurance covers these costs so the customer and you don’t have to.
It’s hard enough finding customers when starting a business, but a lack of insurance can really mean you lose credibility and trust.
Protect your company
Fundamentally, insurance exists as a little safety net to catch you when you fall. As seen on the Tivly website, commercial insurance can protect you from all sorts of things. This includes general liability, property damage, theft, vandalism, malpractice claims – the list goes on and on.
If you don’t have commercial insurance, you are unprotected when any issues arise. Let’s say your business gets sued because a customer hurt themselves using one of your products. Or, what if your office gets damaged or broken into? Without insurance, you have to deal with lawsuits or repairs out of your own pocket. This eats into your bottom line and genuinely could bankrupt a business.
So, insurance is there to protect you from lots of financial problems.
Avoid legal problems
Lastly, you need business insurance because there are certain laws that demand you have it. For instance, worker’s compensation insurance is required by law in most states for most businesses. If you’re caught without this, you can incur all sorts of fines and penalties. Not to mention the damage it does to your reputation.
Likewise, specific industry laws may state you need a type of insurance to ply your trade. It’s crucial to check all the rules surrounding this to be 100% sure that you have the right insurance. Otherwise, you could be embroiled in all sorts of legal problems.
So, yes, you do need business insurance. It can feel annoying because you’re paying premiums every month. This eats away at your cashflow, but it is worth it in the long run. Insurance is one of those things that doesn’t show its full value until it’s called upon. You get annoyed at the costs, but the second something goes wrong and your insurance kicks in to save you, you’ll be overjoyed that you had it.