There are currently about 30.7 million small businesses in the U.S., representing around 99.7% of all businesses in the country, as reported by the U.S. Small Business Administration (SBA). Moreover, a recent study by Marshall & Swift/Boeckh found that 75% of small businesses and 45% of small business owners in America are underinsured and uninsured, respectively. To put it another way, most of these businesses have little to no chance of recovering from a natural disaster or a lawsuit against them.
This is where business protection insurance comes in handy. From protecting your business against named perils to safeguarding your employees, here is a detailed look at four ways in which business insurance can save your business:
1. Mitigated Lawsuit Exposure
In general, different business insurance policies cover various risks. When it comes to protection against financial risks, for example, the key policy is general liability coverage. More specifically, this policy protects your business against damage-related lawsuits brought against your business by angry or unhappy customers.
For instance, if your employee’s actions lead to the damage or loss of a customer’s property, the customer can file a general liability claim instead of suing your business for damages. This, in turn, ensures that your business would not necessarily have to incur the financial loss associated with such damage.
2. Protected Business’s Assets and Property
The loss of expensive and vital business equipment due to theft, fire, or other disasters can easily cripple your business operations. One of the best ways to protect your business’s assets and property against these and other similar risks is to carry business insurance and transfer the risk to your insurance carrier. By doing this, you would improve your business’s resilience to disasters, allowing you to preserve it for future generations.
It is worth noting that up to 60% of small businesses in the U.S. cease their operations permanently after a disaster, as reported by the Federal Emergency Management Agency (FEMA).
3. Happy and Engaged Employees
As you probably know, your employees can make or break your business. For this reason, you should do everything possible to retain your best employees. In addition to treating them fairly, you also have to act in their best interests.
One of the best ways to achieve this goal is to carry the relevant business protection insurance policies. Examples of such policies include group health insurance coverage and workers’ compensation coverage. These policies would demonstrate to your employees that you care about their health and safety. Both these policies are equally important and cover the costs associated with workplace injuries, saving your business from having to meet such costs out-of-pocket.
4. Covered Legal Costs and Damages
In general, virtually all businesses face exposure to lawsuits by employees, customers, and competitors. Data from the SBA’S Office of Advocacy show that up to 50% of small businesses in the U.S. are involved in at least one business-related lawsuit in any given year. Take note that the cost of such lawsuits usually amounts to tens to thousands of dollars. To give you an idea, the median costs for a business-related liability lawsuit starts at $54,000 and can be as high as $91,000 for a contract dispute lawsuit, according to data from courtstatistics.org. This means that losing a business-related lawsuit could have dire financial consequences for both you and your business, especially if you have no business insurance policy.
Business insurance for companies can protect your business from potential financial ruin. Do you have additional questions about your business protection insurance? If so, then contact the experts at The Reardon Agency. We are ready to assist you with all your coverage needs today.
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