Insurance is one of the ways to ensure the financial security of any person or business and has become such an important part of American life that it is a legal requirement in many situations. Many fledgling entrepreneurs might balk at the cost of insurance as a monthly expense of their new business, it is a safety net that can help in times of crisis.
In this article, we are going to talk about the risks a small business might face should it remain uninsured. Here are just some of them:
1. It could be penalized for violating local laws
Every state and local government has its own rules and regulations on top of federal requirements. As such, it is good to be aware of the rules and regulations in your area to avoid penalization.
Workers’ compensation insurance, for example, is a requirement in most states. Certain cities might require general liability coverage in your insurance policies, in the event of a lawsuit. And some natural disaster-prone areas often require business property insurance.
2. You might never recover from the financial fallout
The COVID-19 pandemic has been terrible for many Americans, entrepreneurs included. With the extended closures brought about by the quarantine, many businesses are suffering the weight of a greatly diminished capacity to profit.
Enterprises that managed to secure commercial insurance, however, are significantly less likely to suffer given that many policies cover situations in which businesses are forced into circumstances that greatly hamper their ability to profit.
3. You might be leaving your employees without protection
Injuries and illnesses could cost thousands and thousands of dollars depending on the severity. If such conditions happened or were caused by working at your business, you could leave yourself open to a lawsuit that you might end up having to pay out of pocket.
And if you don’t have the financial capacity to pay this insurance, it leaves your employees injured or ill with little hope for recovery.
4. You could lose the property
The event of a natural disaster happening in your area is a certainty. Whether it is an earthquake or a tropical hurricane destroying parts of your business, it is bound to happen one way or another. Going without business property insurance (or crime insurance, depending on your area) could mean the permanent loss of assets without hope of compensation should a flood, theft, or other unexpected tragedies happen.
Combined with commercial insurance, this policy can help rebuild your business and keep it afloat while it is being rebuilt.
5. You might be keeping your enterprise’s financial credibility stagnant
Say it comes time to scale your business. If you’ve managed to survive without insurance (which is highly unlikely) at this point, it might be difficult down the line to secure financing without it. You leave your business at risk of financial stagnation without the safety net of insurance.
At the end of the day, insurance is a way to regain control in the event that something happens that you had absolutely no control over. Whether it’s a natural disaster, an accident, or crime, it is still important to have the safety net of insurance protecting your business.
And if you’re looking for a commercial insurance partner, why not send us at For The Insured a message? We’re happy to help!