6 reasons why you should insure your small business
All business owners have to deal with different potential daily risks. Risks can range from an employee or customer injuring themselves on the company premises, to a break-in leading to loss of goods, and any of these scenarios can cause significant financial setbacks. The best way to protect against things potentially going wrong is to take out adequate business insurance.
Here are a few reasons why business owners should consider business insurance:
Insurance is highly important for maintaining the well-being of the business when things go wrong. Having insurance may have an impact on whether or not customers engage in any contract, especially when there are substantial costs involved. When customers are aware of a business being insured, this shows that if anything goes wrong, the company will be in a position to compensate any losses. Insurance to cover these type of incidents is known as Public Liability Insurance (PLI) and is usually a legal requirement.
Builders, for example, should carry insurance against injury, damage to neighbouring properties and even damage to the work being carried out itself before completion, or before the customer has had a chance to insure it themselves. Insurance can protect both the customer and the business.
2. Protection of employees
Employees are the most valuable asset in a business. Employer’s Liability Insurance (ELI) is usually a legal requirement. Still, every good employer should also consider providing additional insurance such as long term disability, even if the employee may have to contribute. Insurance that covers an employees’ well-being doesn’t just protect them; in the event of an accident, it also protects the business from any claim made against them.
3. Legal requirements
As discussed, most businesses are legally required to take out Employer and Public Liability insurance. The precise requirement depends on the individual company. If a regulatory body governs a business, the regulator may require firms to have a specific form of insurance. Accountants and solicitors, for example, are required to have professional indemnity insurance. It is important to note that business owners may not be able to undertake work for a customer without appropriate insurance in place.
4. Asset cover
Every business should have physical assets insurance. Business owners that are responsible for insuring the premises where the company operates should consider an all-risk type of insurance. All-risk provides fairly comprehensive cover; however, do check the fine print for any exclusions.
Business contents insurance is separate. Businesses can choose ‘replace as new’ or indemnity insurance, which will factor in the cost of wear and tear in a claim. Company owners can also insure against business interruption due to damaged property.
More businesses are also considering cyber insurance, which can help them recover their systems in the event of a cyber attack.
5. Protection against losses
It’s a common mistake to think that a limited liability company or an incorporated business automatically have protected assets. An uninsured business is exposed to the risk of crippling legal costs, for example, should somebody sue for a physical injury sustained on the business premises.
With the right insurance in place, most situations can be covered and minimise any loss to the company. Insurance is the best way to ensure a business can continue to operate when recovering from any unforeseen circumstances that may cause damage.
6. Help recruit and retain staff
Businesses need to instil trust not only in customers but also in potential employees by showing they are insured. Benefits that include private healthcare, life and disability insurance are attractive perks for candidates and offering them will help keep a business competitive when attracting talent. It can also aid in retaining employees.
To conclude, if you’re a business owner then insuring your business is almost always a good idea. Be sure to do your research before signing up to any contract in order to get the best deal!