Your small business is the result of a dream, a lot of hard work, and a significant investment. Without the proper insurance to cover your small business, you may end up risking it all and ultimately losing it all. Small business insurance is not only essential for protecting your business, but it may also be essential for growing your business. Read on to find out why.
The High Price of Baking a Cake
You may have heard about the Colorado bakers who refused to make a cake for a same-sex wedding. The Supreme Court upheld their decision. A national debate ensued dividing the country. A similar case you may not have heard so much about was the Sweet Cakes By Melissa in Oregon whose outcome wasn’t so sweet. This bakery was ordered to pay $135,000 in damages. Food for thought, could your small business withstand a financial payout like this and what about your business reputation? Could you survive?
Building Your Reputation
Regardless of the sort of business you have, your customers are your number one priority and earning their trust translates into making your reputation. Imagine you’re in the roofing business. This is specialized work that comes along with a degree of risk to your staff as well as the homeowner. Liability insurance is a necessity if your priority is having your customers feel confident about you working in their home. Without it, you’re opening yourself up to potential lawsuits and liabilities that will destroy your small business unless you have the coverage. You owe it to your clients and reputation to invest in small business insurance.
Typical examples of small business insurance
Not every small business will have the same insurance needs. It’s a good idea to think about your customer profile, physical working space, how you interact with the public, and the number of employees you have. A home-based business will have different insurance needs than an electrician’s business. Here are some of the typical kinds of small business insurance:
- general liability insurance
- professional liability insurance
- product liability insurance
- business owner’s policy
- home-based business insurance
- commercial property insurance
The U.S. Small Business Administration offers some good advice for small business owners and entrepreneurs.
Networking Can Cost You
Participating in a trade show or industry event that will allow you to build your reputation within the industry and create relationships. But most trade shows and conferences now make it mandatory for participants to provide proof of their insurance. Similarly, in the event that your small business decides to host an event thanking customers or partners, coverage will be required. In the case of planned activities that involve alcohol, the risks are even more significant. Without insurance, you’re leaving yourself open to a world of potential lawsuits and unnecessary risks. Some examples of such events may include:
- farmer’s markets
- trade shows
- networking dinners
- golf tournaments
- company parties
- speaker events
- industry awards
Without small business insurance, you won’t be participating in events or growing your business and network.
Leasing Your New Company Digs
As your business grows, so will the facilities required. Taking on a commercial lease will require you to provide third-party coverage as a tenant. This policy protects you and the landlord if a third party sues because of an accident on the premises or property damage. Make sure your insurance company is aware of your new situation and can offer you advice on any changes your coverage may require.
Preparing for The Unexpected
So you’re ready for potential third party accidents, networking and event opportunities, and the day-to-day coverage that will keep your small business in business. What about the unexpected? Natural disasters are difficult to anticipate, but that doesn’t mean you can’t be prepared. Yes, you may be paying for something that will never happen, but too many small businesses find themselves underinsured when disaster strikes.
An article from MBAF, Certified Public Accountants has some insightful points for small business owners and good advice such as the following: “Cost is a factor when owners decide not to purchase specialized disaster insurance; the premiums and deductibles tend to be high because damage tends to be heavy and insurance company payouts in turn are large. Small business owners without a lot of spare cash often decide to take their chances, and hope that disaster never strikes.” The fact is, disaster can strike anytime and having the appropriate coverage is the cost of doing business.
Growing Your Small Business
We’ve looked at why you need small business insurance to protect your business and stay in the game, but what about growing your business? Insurance can help with that too and here’s how. Offering health insurance to your employees may deliver your business the following bonuses:
- attract a higher caliber of employee- health insurance is a major perk that will be attractive to many employees and may help you draw a new category of talent to your small business
- retain staff for longer- investing in your team shows that you care and many employees will choose to reciprocate with their loyalty
- keep staff morale high when they know you care-a caring workplace is a healthy workplace
- keep staff healthier and see greater productivity-don’t suffer unnecessary employee absences due to illness, keep your workforce healthy
While legally you don’t have to provide employee health insurance when you have under 50 employees, the health and growth of your business will ultimately benefit from this investment.
I Get It, My Small Business Needs Insurance, What Now?
You understand how important insurance is for your small business and you’ve identified the kind of coverage you need. The next step is speaking to an agent who can start helping you grow your business with the right coverage and protections. At Smallwood Insurance, we’re waiting to talk to you. Contact us for your quote on small business insurance today.