The Importance of Having Small Business Insurance

Building a business is incredibly hard work that takes time, effort, and money. Your business is your baby and you most certainly do not want anything to happen to it which would undo all your progress. This is where small business insurance comes into play. 

Commercial insurance helps to manage business risk your company may be exposed to. We can’t predict what could happen. Without adequate insurance or commercial insurance that matches the nature of our business operations you and your company may be at risk of a loss or even damage to your reputation if you find yourself involved with legal matters.

Here are a few reasons why you need to have small business insurance.

When you lease a commercial space, you will likely be required to carry CGL insurance.

For many small businesses, renting a first commercial space is a big deal. However, on closer inspection of your lease documents, you might notice that there will be a clause that requires you as the tenant to carry CGL insurance – otherwise known as commercial general liability. This coverage may help to protect your small business against claims of property damage or bodily injury to a third party. 

Commercial equipment and vehicles are expensive to replace. 

Are you a business that makes use of expensive equipment or uses a commercial fleet? If so, you understand the importance of these items. How much would it cost you to replace these items if something happened to them? You could be in the hole for a lot of money. Property insurance, commercial auto insurance, and equipment breakdown insurance can all be included in your small business insurance package and may help reimburse you for any repairs or replacements if you should suffer a loss. Almost every business requires some kind of equipment in order to go about its day to day operations so it is imperative that you ensure you have the right protection.

Many clients may request or require proof of insurance before they work with you.

Insurance shows that your business has a) credibility and b) protection, in case anything should go awry on the job. A client may request that you provide proof of insurance before they choose to work with you and this is commonplace when it comes to signing a new contract or partnership deal with another company. Without having the right insurance, a client may question your reliability as a business and opt to work with another company over you.

Liability lawsuits can be expensive.

Any business could be involved in a liability lawsuit at any given point, but this is especially true for companies that provide professional services or advice. Could your business survive a liability lawsuit that could cost you hundreds of thousands of dollars? Commercial liability insurance or professional liability insurance, depending on the nature of the business that you run, is of the essence when it comes to ensuring you have the financial backing should a client bring about claims of slander, libel, misinformation, etc. 

Don’t let yourself get caught without the right small business insurance!

If you do a service or sell a product, you are exposed to risk and need small business insurance in order to ensure your assets and you are adequately covered. It doesn’t matter whether the business you run is small or large – business is business. Small business insurance can protect you from property damage, liability lawsuits, vandalism, equipment breakdown, and so much more. 

Do you have money set aside to do repairs and replacements in the event of a disaster? How long could your business last without income while still paying employee wages, rent, and equipment expenses? If you aren’t sure or find yourself asking these questions, then you need small business insurance!

Cyndy Lane

Cyndy is business journalist with a focus on entrepreneurship and small business. With over a decade of experience covering the startup and small business landscape, Cyndy has a reputation for being a knowledgeable, insightful and approachable journalist. She has a keen understanding of the challenges and opportunities facing small business owners and is able to explain them in a way that is relatable and actionable for her readers.