Business insurance is essentially a requirement for all businesses. The benefits of business insurance definitely outweigh the costs, and it is worth paying for whether it is a corporation or a small business. Business insurance does cost money, and there will likely be some annual or monthly fees for the service, but the cost is still small compared to the amount that the business would have to pay if there were a costly lawsuit. The main reason why business insurance is necessary is because it protects the business from liabilities like theft, vandalism, lawsuits, storms, fires, and more. Going without business insurance will expose the company to a lot of liability and potentially cause the company to haemorrhage money if and when something happens.
What is business insurance?
Business insurance is like any other type of insurance, and the only difference is that it is designed to protect businesses. Business insurance is different depending on the business, their needs, and the insurance provider, but it can include things like property insurance, auto insurance, workers compensation coverage, and general liability insurance. Business insurance is designed to protect the business in the event that something damages the building, their products, equipment, employees, or even customers.
Why do you need business insurance?
All businesses need business insurance whether they are large corporations or small businesses. It is generally not required in most provinces and many start-up and home businesses may not have any insurance in the beginning. Since business insurance does cost money, some entrepreneurs will forgo getting insurance until they have become profitable, and that is understandable. However, it is important that they obtain a good insurance policy shortly after they start because any type of disaster could cost them thousands or even millions of dollars in damages. For example, if a new store opened without business insurance and a customer slipped and fell on the floor, they could be sued for thousands or even millions of dollars for an injury. If the store had business insurance, then they would be protected and they would only have to pay the insurance costs as opposed to all of the money for the damages since the insurance company would resolve the matter.
Since there are other types of business insurance, they still provide protection for a number of scenarios. General liability insurance and property insurance helps provide coverage for fires, thefts, natural disasters, accidents, and etc. Workers compensation insurance is designed to provide protection for the business if an employee makes a workers compensation claim or if they try to sue the company. There is product liability insurance. Product liability insurance is available for companies that make products and it protects them in case a product is defective or injures someone. Auto insurance can protect all of the company vehicles and provide coverage if a car is damaged by another party or if an employee gets into an accident or damages a vehicle.
Business insurance may actually be required for certain types of business depending on the province. Some provinces may require medical related businesses such as hospitals and doctors offices to carry malpractice insurance in case a patient gets injured. Many financial businesses such as investment firms, banks, and credit unions are required to have a certain type of insurance policy as well. Umbrella insurance is also available as a package deal of sorts because it combines all of the different types of coverage into one policy. A business can work with an insurance company to create a policy that will fit all of their needs and include different types of coverage.
How to save money on business insurance
Business insurance costs can change due to a number of factors, so there are some ways to reduce costs. The first thing that businesses should do is compare quotes across the board and meet with different insurance providers to get the best rates. Try to negotiate with them and make sure that all of your needs are met in the policy that you create because you are not obligated to accept a standard policy. Sometimes a business can reduce their insurance rates by increasing their credit rating and just improving their standing as a legitimate business by signing up with the chamber of commerce and the Better Business Bureau. Generally, with most policies if the business gets a low deductible there will be a high premium and if they get a high deductible there will be a low premium. Take some time to look around and never accept the first offer.
The benefits of insurance does outweigh the costs because the costs of lawsuits, natural disasters, or a fire could be so devastating that the company may close down altogether if they cannot afford to pay the entire bill on their own. In this day and age, business insurance is really a necessity, and it is just part of the cost of doing business.