This is a guest post from Carol Wilson who writes for business insurance reviews. She contributes articles about a variety of marketing, business, stock market, and small business topics. She can be contacted at: firstname.lastname@example.org.
For spirited individuals who are just beginning their venture into self employment and small business ownership, one of the last things we take into consideration is small business insurance. Caught up in the excitement of new employees, developing a brand, creating a website, finding a customer base, developing a marketing strategy, and so much more, boring things like insurance are typically the last thing on our minds. However, things like lawsuits, thefts, injuries, and any other kind of damage have to be a high priority for new business owners. Small business insurance is designed to protect businesses against operational loss. Many business owners question whether business insurance is really a worthwhile venture for young, small online businesses. Because online businesses typically have a very low start-up capital, it is reasonable for small online business owners to be skeptical of (sometimes) expensive insurance policies. However, there are plenty of reasons that small business insurance is an important venture in your new small business.
Basics of Business Insurance
There are several different types of business insurance available that cover virtually any risk that a business could possibly face. For small businesses, however, there are generally four basic categories that cover most of the risk faced by small business owners: professional liability insurance, product liability insurance, general liability insurance, and commercial property insurance. These four categories protect different aspects of small businesses.
- Commercial property insurance is very similar to traditional homeowner’s insurance, covering buildings, structures, and the contents within the property.
- General liability insurance covers small businesses against legal claims for injuries, accidents, libel, or slander.
- Product liability insurance is for businesses that are focused on manufacturing, distribution, or retail. This insurance protects the assets of a small business, defending a company against claims of defective or malfunctioning products.
Cons of Purchasing Business Insurance
The most obvious con to purchasing small business insurance is obviously going to be the price of the insurance policy. The cost of small business insurance depends on several factors. Some of the most basic factors include, how large your business is, how many employees you have, the nature of your business, and much more. While the cost of business insurance can be extreme at times, often it is necessary or even required by law. The question for small business owners, especially those operating online, is whether insurance is worth the cost or not.
Pros of Purchasing Business Insurance
The biggest pro of business insurance is protection. Small business insurance provides a company with thorough protection from issues that are out of their control. Sadly, when things go bad in the business world, it is often because of issues that business owners cannot control, such as lawsuits or financial losses. For this reason, business insurance is likely a worthwhile investment if you want your company to withstand the unexpected. There is so much risk that already exists in the business world (especially with small online businesses), that the cost of business insurance is probably worth the reassurance that you are covered.