Many business owners try to save money by not having any insurance or by not having enough. One is just as bad as the other if something disastrous like a flood or a fire wipes out your premises. You stand to lose everything and will have no way to recoup your loss. You will never be able to start up business again and may not be able to pay your debts. Commercial lawyers will tell you insurance is one of the most important aspects of a business.
Not having enough insurance is almost as bad as having none. There will not be enough to cover your loss and start up again if there is not enough insurance. The only good thing is that it may just cover your debts. But that is small comfort if you want to start your business up again.
There are different types of insurance you need for business.
- Workers compensation if you employ staff.
- Motor vehicle third party personal insurance.
- Key person insurance, especially if you are the main one to run the business. Who will do the work if you are injured or ill?
- Insurance to cover loss of equipment and stock due to environmental disasters, vandals or theft.
- Public indemnity if you are a professional.
Not all these types of insurance are compulsory, but if you don’t have them you stand to lose a lot in certain circumstances. Accidents can happen to anyone and if a customer was hurt on your premises and sued your business, you could be up for millions. Having insurance will save you from going broke and perhaps facing jail time if you can’t pay up.
If your business is one where you make or get beautiful items to sell it will break your heart to have them destroyed or stolen. But with insurance, you stand to recover from the terrible loss and go onto better days. Without it, you will be left with nothing and no way to start over, unless you or your family have lots of money in savings that they are willing to give you. This is highly unlikely.
Even though you may not like having to pay the insurance premiums, the cost of not doing so will far outweigh the cost of paying them. You can tailor the cost to be specific for the kind of business you have so that may keep the premiums down to a more manageable level.
Don’t accept just any insurance amount. Get commercial lawyers or accountants to work out what you would need to start again if everything was lost. That way you can have peace of mind that you will be in control of your destiny.