How You Can Protect Your Enterprise Using Business Insurance
In business, the golden rule is to always hope for the best but stay prepared for the worst. Every entrepreneur wants to enjoy running a successful enterprise. However, at the same time, they want to be realistic about the risks involved and have a safety net that supports them through troubled waters.
Shockingly, some CEOs believe that they may be the exception. In other words, they think that their company will never suffer property damage, get sued, or lose valuable assets.
To their disappointment, they realize that a seemingly minor incident is capable of causing major financial burdens for the firm. According to McKinsey & Company, the nature of small business risk is evolving faster than ever.
Without reliable insurance, entrepreneurs like you risk losing relevance in a volatile world. In this article, we will discuss how you can protect your enterprise through different insurance types.
Reasons Why You Need Business Insurance
Depending on your enterprise’s size, you can choose among different policies to stay safe. Click here to learn more about the available options, including general liability, cyber liability, workers’ compensation, property insurance, and business interruption insurance.
On the whole, all these policies aim to uphold your brand’s market credibility and protect its finances. Let’s look at the different reasons why you must insure your enterprise.
Minimizing Financial Losses
There are too many things that can go wrong, most of them occurring unexpectedly. For instance – there may be a major equipment breakdown or a group of customers/vendors may suddenly file a lawsuit against your firm.
If you’re uninsured, you’d likely stay hanging on the hook for repair and replacement costs, legal expenses, and more. Most small companies seldom have the finances to cover such unforeseen costs. It could leave your enterprise in a bad position.
A relevant policy like property & casualty insurance will cover such expenses promptly.
Better Market Credibility
Clients want to collaborate and invest in a protected firm. Across industry verticals, certain contracts can only be carried out when the company provides proof of insurance. Furthermore, staying insured becomes good grounds to make contract-related negotiations.
Imagine a scenario where your enterprise was sued, and you were inadequately insured. A single lawsuit is enough to tarnish the firm’s reputation in the market for a long time. The consequences can sometimes be irrevocable.
Your firm's reputation is also a valuable asset that must be protected. This happens when you have a financial backup for legal fees, compensation, and more.
Money Savings in the Long Run
Running an enterprise comes with its fair share of risks. While some risks are manageable using the company’s existing resources, others become too significant to handle alone. Relevant insurance coverage can work alongside proper risk management strategies to provide the required safety net.
Brooks, Todd & McNeil state that interruption insurance can help cover lost income/expenses during events like natural disasters. Another example would be that of cyber liability that can act as a safety net against cyberattacks and data breaches (becoming increasingly commonplace these days).
These, in turn, will keep profits intact (which may be reinvested into the firm). As a result, you end up saving money in the long run.
Protection of Assets and Employees from the Unexpected
Every company has certain precious assets to protect. These include financial, physical, and even intellectual assets. Numerous threats can take away these assets from you, including vandalism, property damage, loss of income, lawsuits, employee injuries, and theft.
For instance – thieves may suddenly ransack your commercial property one night. Likewise, an insider may leak crucial information into the wrong hands. Another scenario can be the drainage of resources on employee medical expenses (due to injuries sustained on duty).
To protect your company's assets, policies for workers’ compensation, cyber liability, and property & casualty can help. These policies also protect employees’ well-being and reassure them of work safety.
Additionally, you can opt for employee benefits like group health and life insurance. Such benefits will boost their morale, encourage better productivity, and reduce turnover. Employees are also assets, and retaining them must be an important endeavor.
In the final analysis, you don’t want to be among those entrepreneurs whose firms are unprepared for the unexpected. The commercial insurance market is currently growing at a CAGR of 7.5%.
Such growth proves that besides risk management strategies, brands are employing relevant measures to insure themselves and survive the volatile landscape. If you haven’t purchased a policy yet, now is the time to do so (even if yours is a small enterprise)!
