If you own your own business, you may be liable for anything that happens to customers who use your products. You may also be liable for anything that happens to clients while on your property or to employees during the course of their employment. However, a company and its owners may be able to financially protect themselves through a comprehensive business insurance policy.
Sole Proprietors Could Lose All of Their Personal Assets
Those who operate as sole proprietors do not have the same limited liability and asset protection that corporations have. In the event that a client files a lawsuit and wins a financial award, that client could ask to take ownership of the sole proprietor’s house or car. That property would then be liquidated to cover the amount owed to the client or any other plaintiff who is owed money. A business insurance policy will generally cover all or a large portion of any judgment and allow the business owner to keep his or her property.
You Never Know When an Accident May Happen
Even if you operate your company as a corporation, an accident could cost the business a lot of money. Without an insurance policy, this money is going to come from revenues that it has earned over the past year or years. Instead of using that money to hire new employees or develop a new product, it will go toward paying an injured customer or an employee who got hurt while on the job. This could set the company back months or years or force the company to shut down in extreme cases.
Customers Take You More Seriously When You Have Coverage
When you work in a service industry, your customers want to know that you have protection in case of an accident. For instance, if your employee is injured while putting new shingles on a homeowner’s roof, that homeowner doesn’t want to be liable for what happens on his or her property. Furthermore, a customer may think that a company that doesn’t have liability protection may not be able to afford it, which may be a sign that it is too small to effectively do the job.
Whether you are a startup or established company, business liability insurance is something that should be purchased as soon as possible. Having such financial protection allows a business to adequately take care of any accidents that may occur without putting its existence in danger. In the long run, a good insurance policy will cost far less than hoping that nothing will ever go wrong.