Building a business from the ground up can leave you with what feels like so much pressure to keep it afloat. Especially because it’s your livelihood; it’s what your employees are counting on, but it's also taken a lot of your time, effort, and money to get to a place where you are running a successful business. So you might be wondering what ways you can protect your business but what do they all mean?
It’s not uncommon to be tried to be upsold for policies and coverages that not only you don’t need but actually could have many holes in to keep those companies from paying out when you need it most. So we have decided to put together a fully comprehensive guide so you can work smarter, not harder. Investing in your future might mean spending a bit more in areas you didn’t anticipate but it could always work out for the long term.
It’s important to understand that insurance is there to protect you from anything unexpected or potential threats trying to take over what you have worked so hard on. While each policy or type of insurance isn’t applicable for every business, for example, cyber security insurance wouldn’t necessarily be useful for a business that primarily provides a service such as barbering unless they had a server that could be hacked. This is all completely dependent on what you not only find useful but can afford and could help boost your business to the next level.
Why Exactly Should I Invest in Business Insurance?
While we covered a few of the bases’ in the introduction, it’s very important to have a full understanding of why exactly this would work for your business.
To start it gives you so much peace of mind when it comes to certain aspects such as safety and security and just having that second line of defense if something were to fall in between the cracks allows you to move past it almost or barely unscathed. This allows you to dedicate more time to different areas of the business because this impending doom isn’t hovering over your shoulder but at the same time, it gives you that free pass to take some more business risks in hopes of a bigger payout. A lot of big-time names have gotten to where they were because of the risks they took and without risk, there isn't reward. By having that safety net, you are protecting yourself from the risk while reaching out for the reward.
When you grow, you are also improving your connections while putting your face on the map, which is a good deterrent for businesses that want to partner with you if they see that you are not protecting yourself. It brings large amounts of credibility to a company, making it more attractive to shareholders, partners, and clients.
While it’s all good to be a more secure and attractive business option for a potential partner, it might be something that you legally have to comply with. Trying to skip any corners in the modern business world is not good for anyone. Certain types of insurance, such as worker's compensation, may be mandatory. Be sure to do your research, especially if you are growing your company Different laws might apply to you and it’s always best to be on the right side of the law. Not to mention, it gives your staff more peace of mind knowing they are secure in their role and have support from their workplace.
Essential Business Insurance Policies
General Liability Insurance
This is something that most businesses adopt as a part of their insurance coverage. In every case, it’s better to have it than not, especially in large chains or the smallest of stores. If you are unfamiliar with liability insurance, it covers any bodily insurance, property damage, and personal injury claims brought by third parties. This would be perfect for companies that reside in an office, or have a store or restaurant that staff and the public have access to. You might not think accidents will happen but you will be surprised, no matter how safe you think a space is.
Property Insurance
This is essentially what it says on the tin: it protects all of your physical assets, including buildings, equipment, and inventory, even from theft, vandalism, and fire. The details of what is covered and under what conditions should be agreed upon with the policyholder but remember to read the small print because you don’t want to have to get through the claiming process and learn to find out you are only insured by electric fires and not potential arson. Unfortunately, you need to consider things like that, but protecting large-value items should always be a priority.
Business Interruption Insurance
This policy covers any loss of income and expenses if business operations are disrupted due to a covered event. This could be one of many things, such as key man insurance, which covers your company if any unforeseen event prevents a key person in the company from returning to work. This essentially allows the business to find a replacement, mourn, and also stay afloat during such a shocking time.
It’s little policies like this that protect companies from really obscure but also things that you wouldn’t have expected to happen and end up being a godsend.
There are many other types of business interruption insurance, such as credit insurance, export insurance, and much more. Each is suited to different kinds of company structures so research into what can protect against losing money is essential.
Cyber Liability Insurance
As mentioned before, cybersecurity is essential for many businesses, especially now that we are in the digital world, so this type of policy might become more of a non-negotiable with the current shift.
Data breaches are no longer surprising or new, so this is both a scary and a serious issue that businesses need to be aware of. By taking out a policy, you will be protected from data breaches, legal fees, and expensive credit monitoring if this were to happen. To get a full insight of how serious of a threat this is, you hear things all the time about people being hacked but even NASA was hacked by a young teenage boy. If that could happen, then it’s very possible it would happen to you.
Beyond The Essentials Insurance Policies
The list above just covers the general umbrella and terms for each kind of insurance policy you should cover. While it’s important to do your research and see what cover best supports you and your business size, it’s also important to know the policies you might not have known even existed. While these are just a small insight on how there is pretty much an insurance policy for everything, it just reiterates that it’s always better safe than sorry, and I will be singing that till the cows come home.
Some obscure insurance policies you could consider:
Errors and Ommissions Insurance
This policy protects against claims of negligence leading to financial loss for a client. This could be great for regulated brokers, which are their route of support. It’s not always a company's fault if a client is negligent and reckless with their investment choices. While it’s common that this is the other way around, of course, it can go both ways. This is key for those who work closely with their clients and want to be protected from false claims and potentially harmful accusations.
Directors and Officers Insurance
This protects a company leader from personal liability for alleged wrongdoing. Whether a director is being accused of doing something by the staff, shareholders, or anyone else, this allows them to have that area of protection until the truth is revealed. This happens all the time in modern times where allegations, lies, and threats are being made, so especially if you are of good character and wish to protect yourself and your business, these little policies are very worthwhile.
Final Thoughts
Investing in the right business coverage is not only an investment in your future, but it also adds all these extra layers of security, protection, and credibility essential for a growing and successful business. By understanding your coverage options, researching the best brokers, and tailoring your plan to your specific needs, you will be well-equipped to overcome the external challenges of running a business.
Having a backup plan keeps you afloat for the long run if you think large companies like Tesco, Nike, and Amazon keep their businesses successful for so long without insurance. If you wish to harness the power to get through the recession, real life, and threats from all angles, you need to make sure your armor is on and this way you can move forward. You will also have the confidence to break out of old routines and take some necessary risks to break through to the next steps of growth and success.
Remember to consult with a couple of qualified insurance professionals, like Executive Life or Xero Psg Approved Vendors to discuss your options and ensure you have the right coverage in place.
