It is often overlooked item when starting a new business. Many people don't take into account the reason behind needing business insurance or the cost of this type of insurance when they figure out their business planning or financing.
Why Insurance Is Needed: Business insurance, while not required for every business by law, should be required out of common sense. What this insurance does is cover the business, the business owner and any monetary losses in case of liability or loss of business which would otherwise put the owner out of business. When a business suffers substantial loss due to a major event the insurance acts as a safety net to ensure that the business is not crippled or completely fails if possible. Business insurance can also act as a safeguard in case of complete loss for the owners against any outstanding costs. Some of the things covered by most business insurance are included in this list:
Natural disaster Fire Machine or equipment failure that shuts down the business Loss of income due to employee negligence Lawsuits brought against the business Ensure ongoing operations due to adverse affects from man-made circumstances outside the business Consumer issues or problems.
Business insurance can help defray, or sometimes completely cover, the cost associated with the list above. This is a huge help when most of a business's finances are tied up or would not be enough to cover huge lump sum expenses.
Small Business Insurance: The smaller the business is the more likely the need for business insurance in today's world. Many, if not most, small business owners will have placed their entire lives and earnings into the business. Several reasons exist for the smaller business to own business insurance: When a large problem requiring a financial outlay large enough to destroy a small business.
* Problems requiring large amount of cash can destroy a small business. * Banks and other financial institutions very often will require an acceptable business insurance policy as a condition of a small business loan. * In the event of the death of a small business owner insurance guarantees payment of all outstanding business debts. * If the business is involved in an accident insurance will be needed to cover the costs of the accident and defense of any liability arising from it.
The size of a business doesn?t matter, unforeseen problems and costs can be crippling to the day-to-day operations. Business insurance is the only way to protect the owner?s investment and guarantee ongoing operations.
Author Resource:
Susan Reynolds is the webmaster for a leading South African Insurance Portal that provides consumers with the best Commercial Insurance Options .
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