Business owners take on so much risk just by seeing their dream through. The last thing they need is to under prepare for many of the issues that could bankrupt them and put them out of business. To prepare, however, you first need to be aware of those risks.
Every responsible business needs to do three things. The first is to know what risks can come up; the second is to mitigate the risk to make those issues less of a risk. The third is to have a solid backup plan for if that disaster does strike. The first two steps will require an ongoing commitment. The last is actually very straightforward – you’ll need insurance.
Insurance may not always be a legal requirement for your business type, but that doesn’t mean it’s not essential. Every business, for example, will need to get insurance to protect themselves against these five common risks:
- Lawsuits
It is your duty as a business owner to provide a safe, accessible space for customers and employees. Violating either’s rights or inadvertently causing harm can result in a lawsuit. These lawsuits can be no big deal, so long as you’ve not done anything criminally or excessively negligent, but only if you have commercial general liability insurance. This puts a buffer between you and liability claims and also helps you weather the storm of the entire experience. Yes, your policy rates will increase if you have to use them, but these lawsuits can otherwise bankrupt many companies.
- Property Damage
There are so many issues that can impact your commercial space. A fire can burn everything to the ground. A flash flood can damage your electrical system and products. Thieves can steal and public unrest can lead to vandalism. There are so many risks associated with operating a commercial building, and the best way to help yourself through the fallout is with property insurance.
- Cyber Attacks
Cyber security is essential for all businesses, from one-person shows to international conglomerates. Cyber crime is on the rise, and if it strikes you, then your company can end up reeling from extreme damages. You may lose money outright due to a ransom situation. You may lose customers due to the breach of trust. You may have your company outright deleted. However the cyber attack impacts you, know that you can better manage the fallout with cyber insurance.
- Equipment Damage
Equipment can be incredibly expensive to fix or replace. While yes, you’ll always need to do your utmost to keep your equipment in good condition, things happen. If you cannot manage those costs or don’t have the sort of credit that can manage to buy new equipment through financing, then equipment breakdown insurance is an absolute must. This will help you manage your equipment costs.
- Injuries
Worker’s compensation is essential in many industries due to the increased risk of injury. The restaurant and trade industries, for example, will often legally require you to have worker’s compensation insurance before you hire anyone. This is in your best interest, as it protects both your employees and yourself if an accident at work ever happens.