Starting a business is risky. One of the ways to mitigate that risk is to buy business or commercial insurance. Depending on the type of business you own, state and federal laws may require that you buy and maintain certain types of insurance.
Whether you are required to maintain business or commercial insurance or not, it pays to do. Before you go out and buy business insurance, it is important to understand your options.
Various laws may require that all businesses maintain certain types of business and commercial coverage including general liability, workers compensation, property insurance, commercial auto insurance and excess liability and commercial umbrella policy. Many of these policies may also be required by vendors or other business partners and suppliers.
Here are a few reasons it is important for business owners to buy business and commercial insurance.
One of the best benefits of taking our business and commercial liability insurance is coverage from liabilities in cases of accidents or injuries. Insurance companies will cover your business against accidents and injuries up to the amount stated on your policy. This allows you to continue running your business and maintaining smooth cash flow even when facing lawsuits and other liabilities.
Closely related to liability issues is the loss of business assets without insurance protection. Depending on the type of business or commercial enterprise you own, you may be exposed to dangerous situations that may result in business loss without insurance protection. Losses due to theft, vandalism or nature occur frequently and this could result in catastrophic losses that may be difficult to recover from without insurance protection.
As mentioned earlier, most states and the federal government require businesses that deal with the public to maintain certain kinds of insurance coverage ranging from workers compensation to general liability. Also your vendors, suppliers and other business associates may require coverage for unpaid goods. Obtaining business insurance allows you to stay legal and protect your assets.
Most banks and financial institutions will reject loan applications without the necessary insurance coverage. These lenders want to ensure that their investment is safe and will often require that you provide evidence of business or commercial insurance before lending any money to your business. Without insurance coverage, it may be difficult or impossible to get the loans needed for business expansion, growth and renovation.