Business insurance is a risk management tool, which makes it possible for business owners to transfer the risk of a loss to an insurance company. It is very important for every business owner to be protected by insurance. We spoke with an insurance expert who ran a Xmas campaign about what could happen if you do not have the right business insurance in place.
You could incur the wrath of the law
Insurance is a legal requirement if your business employs people. Employers’ liability cover is a business insurance plan that protects your staff and sub-contractors in the case of an accident or work related injury. Your business is legally liable if anyone gets injured working for you, so, without this cover, you are taking on a huge risk. It doesn’t matter if your business involves heavy machinery or not. A worker can sue you for getting injured simply slipping on the stairs.
You could lose credibility
Credibility is important, especially if you are in the business-to-business setting. Having the right level of cover shows you are a respectable business that doesn’t treat health, safety and business risks with a nonchalant attitude. Without proof of adequate business cover, it can be an uphill task to land new business, especially when you are in a competitive, or health and safety conscious sector.
Your business will be vulnerable to risks
A business owner that doesn’t take out the right business insurance is one that considers the risks of his business to be small, even affordable. If you have this mindset, then there is a good chance that you have underestimated these risks.
The probability of your business getting hit by a flood or destroyed by a fire may be very low. However, one disruption to your business and you may be staring at huge consequences. Some common disruptions are police cordons, criminal investigations, loss of premises, loss of stock,and even road works. These can heap huge costs or losses that severely hinder your business cash flow.
You risk repossession
When you fail to take out business insurance and get hit by a law suit and need a business lawyer, you may end up losing your business premises, home or vehicle. This may happen in the context of debts you’ve accumulated while setting up your business. When cash flow is affected in a business, so many things can go wrong.
However, much of the negative fallout can be prevented if you have the right business insurance cover. There are many types of business cover, so you should talk extensively to an expert to be sure you are taking the right cover for your business risks.
Image credits to : Colin Stebbing