As a business owner, it’s challenging to cover all your bases, especially if you are new to entrepreneurship.

You might wonder, do you need business insurance?

Businesses can’t afford to be uninsured. If you’re on the fence about purchasing commercial coverage for your business, it’s time to get down.

Keep reading for five of the top reasons your business must have insurance.

1. It’s the Law

All businesses in the United States, including small businesses, should have business insurance.

Depending on the insurance and where you are located, you may be legally required to have insurance. If you have hired employees, you are likely required to carry workers’ compensation insurance.

Each state has its own requirements for liability insurance. Check the laws in your state to determine which kinds of insurance you are required to have in place.

Don’t make the mistake of thinking business insurance is a waste of money. Failing to have the required insurance can ruin your business and could lead to unthinkable financial loss.

Here are some common examples of costly incidents that could leave you in serious trouble without insurance:

  • A fire or flood destroys the building your business is located in or your inventory
  • A lawsuit from a customer who was injured on your property and claims you were negligent
  • If your customer or client’s personal information is stolen

2. Contractual Requirements

For many businesses, commercial insurance is required per the terms of contracts they enter.

Businesses contract with other entities for all kinds of reasons. These contracts often outline financial responsibilities and liabilities and require insurance in place to protect both parties.

Here are some common examples of contracts that require insurance:

  • Loan agreements
  • Rental agreements
  • Client contracts

3. To Protect Your Employees

There’s a reason that most states require businesses to carry workers’ compensation insurance. It protects employees by providing coverage if they are injured while on the job.

There are two types of benefits provided to employees by worker’s comp insurance:

Medical

Workers’ comp insurance will provide medical benefits to employees who become injured or ill on the job.

For example, if an employee is involved in a workplace accident or trips and falls and becomes injured while at work, they will receive compensation for the cost of their medical care. In exchange, they cannot sue you.

Lost Wages

Workers’ compensation insurance also covers wages lost by employees unable to work due to their workplace injury. So, if the employee who was involved in an accident can’t work for an entire month, workers’ comp insurance will provide benefits to help cover the wages the employee lost.

Having workers’ compensation coverage will also help you recruit and retain employees. When employees are looking for a place to work, they are looking for benefits in addition to salary.

The best employees will have the highest standards when it comes to both salary and benefits. Having workers’ comp coverage is an easy way to make your business attractive to prospective employees.

You will send the message you care about your employees and you will be there for them through good and bad.

4. To Protect Your Customers

Your business needs a commercial liability insurance policy to protect your customers in case of an accident on your property because of you or your employees’ negligence.

If a customer is injured on your property and it’s your fault, they will sue you. Liability insurance can help cover the cost of your customers’ medical care, lost wages and pain and suffering. Some liability policies offer medical payments available to your customers regardless of liability.

As you can imagine, being able to help customers in this situation will go a long way regarding customer retention and public image. Customers will be more likely to do business with you if they feel that you care about their safety.

Business insurance can also help protect your customers’ personal data. Data breaches are becoming increasingly common.

Consumers are hesitant to trust a business who has experienced a data breach and exposed their personal information. Business insurance not only covers you following a data breach, but it gives the public confidence in your business, making them more likely to trust you again with their personal information.

5. To Protect Yourself

The number one reason your business should have insurance is to protect itself.

As a business owner, failing to have insurance is the biggest mistake you could make. It’s obvious that you need insurance for your property, but you also need all of the insurance that comes with a Business Owner’s Policy.

For example, if your customer who slipped and fell sues you, without insurance, the legal fees would be crippling. The bottom line is, you can’t afford to not have business insurance.

Business insurance can also protect you, as the owner of the business, from being vulnerable in case of a lawsuit.

Do You Need Business Insurance?

We hope you’re no longer wondering if you need business insurance. Of course, you need it!

Not having business insurance simply isn’t an option. You could face backlash from your customers, employees and the law, not to mention the potential financial risks.

If you don’t have a business policy, get one today. Contact us now to learn more about how we can help protect your business.