The basic reason to carry any type of insurance is for the peace of mind it provides. Knowing you're financially protected in the event something terrible happens can be well worth the cost. Owning a business has enough headaches, you don't need the added stress of worrying about a potential disaster. Although paying the premiums may strain your budget, it would probably be a good investment--if for no other reason than the peace of mind.
Litigation Runs Rampant
An unfortunate aspect of modern life is that we live in a litigious society. It seems like some people are ready to sue at the drop of a hat, for any number of seemingly insignificant reasons. As a business owner, you are a target for them. You are seen as rich because you own property and produce a product or provide a service. It's sort of a modern day share the wealth point of view. You need to be financially protected from that kind of person.
Legitimate Claims
Keep in mind that there may be legitimate reasons for a claim or lawsuit to be brought against you. Accidents do happen, and people get hurt. No matter how safe you try to make your property, it's possible for someone to slip and fall. You can take every step you can possibly think of to ensure your product is safe, and someone may still be injured while using it. Although you may have instituted the very latest in safety measures for producing your product, someone could still be injured on the job. It doesn't matter how well trained you are, or how carefully you fulfill your professional obligations, it's possible that someone may not react the way they should to your services, and you could be named in a malpractice suit. The list of potential problems is endless.
Better Safe than Sorry?
There are many factors to consider when you try to make up your mind about whether or not to carry business insurance. The more conservative you are, the more likely you'll be to err on the side of caution. Better safe than sorry, right? It's a smart approach. The potential for financial disaster far outweighs the price of business insurance. That is the feeling of the majority of business owners, especially those who actually have adequate insurance coverage. Knowing you will still have a business even after a disaster or devastating law suit can help you sleep at night so you can operate your business efficiently, and with a clear conscious.
Types of Business Liability Insurance
There are four basic types of business liability insurance available, although you can get coverage for nearly any eventuality. The fundamental types are general liability, product liability, professional liability, and discrimination liability. Each will cover you for specific aspects of the business.
Mandatory Coverage
There are a couple of types of insurance that are mandatory, depending on your circumstances. If you have a certain number of employees, which varies from state to state, you will have to carry workman's compensation. If vehicles are used within your business you must have business vehicle insurance. Certain professional people, such as doctors, are required to carry errors and omissions coverage, usually called malpractice insurance.
Purchasing Business Insurance
There are many other types of business insurance you can get to protect yourself, and you have a choice as far as the amount of insurance to carry, as well as how much deductible. Consult with a business planner, an attorney, or your accountant to decide on how much and what type of insurance to carry. Discuss the possibilities with your insurance agent as well. With your security at stake it would be wise to study your options and weigh the pros and cons before deciding against carrying business insurance. If you are worried about the cost, get several different business insurance quotes. Costs can vary from company to company and may not be as high as you think they are.
Guest post from Bailey Harris. Bailey enjoys writing about business, insurance, finance, and related topics.
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