Commercial insurance is a term that applies to all businesses and corporations, big and small — although the specifications of an individual business determine the type of commercial insurance that is best to suit their needs. In this article, we begin our discussion of commercial insurance for small business owners by addressing the most pressing question — why is commercial insurance necessary, and how does it benefit a small business to think critically about which plan is chosen?
An essential risk management strategy
Owning a business comes with a lot of responsibilities and risks, especially when hired employees are associated with the business. Business owners, while they should remain optimistic, should prepare for the worst case scenario in the event that things take a turn.
Commercial insurance is an essential measure to protect business owners against legal claims. Without it, they are expected to pay out of their own pocket without any assistance or chance at a resolution that doesn’t break the bank.
In addition, having a commercial insurance plan is the best way to recover from property damage, either from an accident or a natural disaster. Business owners should always prepare for situations that are entirely out of their control to have the best chance at recovery.
For small businesses, an accident or claim can be a fatal blow. Given these costly threats, it is important to remember the statistics surrounding small businesses in the United States. According to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within the first year; that number only increases as the years progress, with a 50% failure rate after five years and a 65-70% failure rate after ten. To contribute to your business’s success and to avoid being a part of this statistic, insuring your business is a must.
Take yourself seriously
Confidence in yourself and your brand is a key factor to the success of your small business. By walking the walk and investing in your business, you are telling yourself and the world that you are trustworthy and on the path to success. Prospective customers who know this about your business — such as family and friends — are more likely to help out and spread the word when they see that they can take you seriously as an established business. By insuring your business, you feel and appear more reliable to prospective customers and to yourself.
In some cases, it’s a requirement
Certain types of business insurance are required by law, including in Pennsylvania. In addition, some industry contracts require proof of insurance to start a working relationship — so depending on the industry you’re working with, you may need to invest in order to negotiate with others.
Commercial insurance policies are an absolute must for any small business looking to stay secure and thrive. Always make sure any decision you make is well-informed after considering all of your options and your present circumstances and consulting extensively with your agent. In our next article, we will explore two types of commercial insurance that are required for small businesses, so you can know that you’re making the most informed decisions possible.
Need more assistance in deciding on your small business’s insurance policies? Give Smyrl Insurance a call today and hear from our experienced agents.
