Being a business in today's climate means you need to be protected from all angles, as something could change in an instant, especially when there is talk of a potential recession in the coming years. Therefore, no matter how big or small, your company is taking the right steps forward by learning how to invest in insurance, why it’s important and which types will protect your revenue stream no matter what interruptions come your way.
Running a business is a constant dance with potential disruptions and that doesn’t change based on size. Unfortunately, while the disruptions can be different, they can still be detrimental nonetheless. From fires and floods to cyberattacks, unexpected events can press pause on everything and leave you not only with a loss of income but a huge risk that operations will have to be stopped indefinitely.
To stop this from happening to your business, whether you
are a service provider or e-commerce company, we have composed a list of
insurance policies that could prevent those business interruption blues.
Why You Need Business Insurance
Imagine having the best couple of months for your business and then the next thing you know, there is a fire from a faulty wire linking to the computer. That’s all of your operations immediately put to an end. This means you are missing out on time to make money and this also puts you out more financially to replace the broken machines and pay staff but other bills will come through the door, such as your gas and electricity, that you need to pay.
All of these things pile up and without insurance, there
is no payout for the loss of earnings and no money to replace all that was lost
and other additional expenses. This could be enough to put a whole company out
of business.
What Exactly Does Each Business Insurance Cover?
Business insurance comes in many forms and goes above and
beyond just protection from fires and other property damage; in fact, it can
cover absolutely anything that suits your business type. Here are some of the
most popular business insurance policies:
Key Man Insurance
This covers businesses when a key person in the business can't return to work because of unforeseen circumstances. This insurance coverage would be ideal for any large or small business that relies on partnerships. For example, key man insurance is for those companies that rely on the skills of an individual; they might offer a whole unique skill set that is irreplaceable to the company.
So this policy would not only protect your company from
unseen circumstances affecting an important part of its operations but also
give you time to replace, mourn or even consider the next move.
General Liability Insurance
This insurance policy covers both bodily harm and any property damage that might occur during business hours, so this might be non-negotiable for a restaurant, customer service or any office where staff and the public are coming together. This is an essential coverage that should be added because these types of accidents don’t come often; they can most definitely happen and without splurging on the coverage, you will pay for it ten times over.
This will protect you from any legal fees or loss of
income and set you up for a potential temporary relocation.
Credit Insurance
This policy is great if you are a B2B company and essentially protects you from suppliers not paying you for your products or services on time. Late invoices are the bane of B2B and while you might be getting business, if your clients, suppliers and any patterning companies aren’t paying you on time, then you have an unsteady cash flow and aren’t able to grow or function smoothly.
These are just the tip of the iceberg when it comes to
insurance policies your business might consider.
Tailoring Coverage To Your Needs
It’s obvious that many popular policies wouldn’t be
applicable to your business type so when it comes to picking and choosing, you
might want certain and more specific coverage rather than a general policy.
Here are some things you need to consider before taking out a policy:
All Events Are Covered
Ensure your policy covers the types of disruptions that
are more than likely to affect your business. For example, if you are located
in a high flood-risk area, being insured for that and knowing what would happen
in the event of a flood is crucial. You must understand the likely risks before
looking at any policy.
Income Coverage Period
In the event of a loss of income, it’s not as simple as
getting money until you are ready to open again; it’s more that the insurance
will support you up to a certain time limit. For example, if your key person
can't return to work, your insurance holder might only be able to pay out for
the next 2 months. The specific terms and conditions should be agreed upon
before, while this can be subject to change during the growth of your business.
Final Thoughts
When it comes to business insurance, it’s not something
that can be skipped so doing your research on what suits your needs is
essential before taking out any policy.
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