According to statistical findings from Insureon, 75% of businesses in the US are undertaxed, and 40% of small businesses have no insurance. Therefore, it is safe to say that most small businesses are at risk from potential damage or lawsuits because they don’t have insurance to cover their costs.
An effective form of risk management used to prevent unwanted damage is through insurance. Every small business owner needs financial protection from occurrences that may harm his employees or customers. This article will discuss the importance of business insurance to a business owner.
1. Reduce Uncertainty
Nobody knows when disaster may strike. It could be due to natural disasters, fire outbreak, human error, or any other calamity. Having business security can bring relief to a business owner, knowing that he is eligible for compensation in case of an actual loss.
2. Protection for Employees and Customers
Business insurance pays for parties that have been affected directly by your business activities. If your product malfunctions or harms a customer, the business owner is answerable for the damage caused. However, an insurance policy covers these forms of losses.
3. Enhances Business Efficiency
A business owner with an eased mindset can focus more on improving his business. Ease of mind comes with not having to worry about damages and losses in the work-place. These damages may include disappearance or damage of goods and property or death of a person.
Therefore an insured trader who knows he is secure thanks to his insurance backup; can enjoy profit maximization by removing any loss uncertainty.
4. Easy Access to Loans
Insured business owners are qualified for more loans if their property is insured; this is because there is a certainty of payment at their death.
5. Legal Requirements
Every business must have an insurance policy as a legal requirement. A business owner is breaking the law if he hasn’t bought insurance claims for his employees. Though this rule may be different in some states, it is a common expectation for most organizations.
6. Continuation of Business
In a partnership business setting, the death of one partner may cause the business to stop functioning. However, surviving partners can continue with the company after the loss. The end of a business partner leads to the economic instability of a business. That’s why insurance policies provide for funds after the death of a business owner.
Each partner is qualified for compensation for the amount of interest, and his dependents are also entitled to get compensation after their partner’s death.
7. Business Insurance Builds Credibility
By having the right policies in place for your business, you gain trust from your customers because you take security matters seriously. Everyone on your premises is safe knowing that you will provide the required protection in case of an accident.
Having proper insurance in place is the most efficient way to safeguard your business in case of threats. As your business advances, your insurance policy should be able to grow as well. Save money and time by consulting an insurance professional to guide you through the insurance process.