Many successful companies know the basic foundations to help a business succeed: a sound business strategy and plan, excellent marketing campaigns, a driven sales force, and a strong leadership team are some of these elements. However, many business owners and leaders tend to forget about one important method of protection that is vital for long-lasting company success: business insurance.
What Is Business Insurance?
Business insurance can refer to many different insurance options. All of these options protect a business’s financial assets, properties, and employees in the event of a lawsuit, damage, or other event involving an insurance claim.
Some types of business insurance include:
- Automobile insurance for company vehicles
- Data breach liability, cyber insurance, and cyber security insurance in the event of cyberattacks
- Workers’ compensation in case of a workplace injury
- Fiduciary liability to protect business assets against benefits mismanagement claims
- Product liability insurance in case a company’s products injure a consumer
An unexpected claim against a company can set its finances back thousands or even millions of dollars if the business is uninsured. This can quickly put a company out of business, making business insurance vital for company longevity.
Certain businesses require specific business insurance options to protect against industry-specific events; these businesses include:
- Property Management
- Banking
- Social Services
- Restaurants
- Homeowners’ Associations
- Contractors
- Retail
Depending on the company’s business model and its day-to-day operations, insurance providers need to design a comprehensive business insurance plan to cover all the business’s bases. This will help protect the company in the event of an emergency or uncontrollable injury.
The Importance of Cyber Insurance
In today’s digital world, cyber insurance and cyber security insurance are becoming less of an optional purchase and more of a necessity. Cyberattacks around the world have compromised business operations, revealing sensitive company data and putting millions of customers at risk through data breaches.
Companies that experience cyberattacks must often provide compensation for customers affected by the breach or settle a lawsuit. Cyber insurance and cyber security insurance help protect a business’s assets in these events. If a company stores sensitive data as part of its business operations, leadership should seriously consider purchasing this type of business insurance.
Protect Your Financial Assets
Imagine that a company produces a toy for children three and under. However, some parents discover that the toy contains small parts and poses a choking hazard to their child. These parents could file insurance claims against the company if a child is injured by the toy – and without business product liability insurance, the company is on the hook for the bill. With insurance, the company can rest assured that the claim will resolve without siphoning financial assets.
Business insurance is not a purchase you should take lightly. Being uninsured is a serious liability for companies, especially if the products they produce or data they collect could cause damage if used improperly. By purchasing the right business insurance and finding the right provider, it can protect a company’s assets from damage in the event of an accident, theft, insurance claim from a customer or employee, or a lawsuit.
Sources:
https://hig.net/business-insurance
https://www.thebalancesmb.com/business-insurance-types-you-may-need-4120996