Insurance is something that all businesses need to have for a range of reasons. Getting the right insurance is vital to your business, but many new business owners are not sure why they need to get insurance. There are a number of reasons and you need to know what they are to fully understand the importance of the right insurance, you might just need advice about a straightforward public liability insurance policy, however, you might need something a bit more specialist like environmental insurance advice.
It Is A Legal Requirement
When you start a business, you have to get insurance because it is the law. There are certain types of insurance that you have to get, but there are others that are voluntary. Not getting the minimum insurance policies can result in your business being fined or not being able to continue trading until you do.
The insurance that you legally have to get for your business will vary depending on the industry you are in and the type of business that you have. Additionally, if you have any employees, this will also affect the insurance policies that you need. It is recommended that you find out what the minimum requirements are for your business in particular.
You Are Protected When Being Sued
No-one wants to think about getting sued, but when you run a business this is a possibility. All you need is one accident, a disgruntled employee or a broken contract and everything could be over if you do not have insurance. While you might win the case, the legal costs that you face could put your business under.
Liability insurance can help you in these cases and it is one of the types of insurance that all businesses should have. When you have this insurance, the insurance company will help when you are sued and you are not going to have to pay out of pocket for anything.
It Makes You Look Credible
In certain industries, having insurance will make your business more credible and trustworthy. Potential customers may not want to work with your business if you are not able to show that you have adequate insurance. Credibility is vital if you want to have a successful business. It is important to note that businesses that offer home services and construction are the ones that generally need to produce insurance to their customers.
Contracts May Require It
There are some contracts that you will not be able to sign if you do not have the right insurance. There are a number of variables that come into play at this stage and you need to consider them. If you lease the property that you work in, you will need to have insurance of your own because you cannot claim on the landlords.
If you need to get a loan for the business, there are many lenders who will ask for insurance as part of the agreement. This is commonly seen when you are getting a large loan to purchase equipment or a building. There are also client contracts that will have a clause stating that you need to have insurance before you can be awarded the work.