When newly-minted business owners are trying to get their startups off the ground, the three things at the forefront of their minds are financing, staff and product. If a business does not have a strong showing of all three, then it’s assumed the business will fail, and in truth, it ultimately will. But what if you have all of the ingredients to make up a successful business? Is there still cause to worry? Well yes, there is.
If you have children, you’re probably familiar with the Nick Jr. cartoon Dora the Explorer. For readers that aren’t familiar with the Spanish-speaking educational cartoon, the cartoon is centered around an exuberant girl child who sets off on daily adventures in search of various “treasures.” Are you still with me? Okay, as Dora and friends make their way along the trail, another character, a weasel named Swiper steals things that Dora needs to finish her quest. Kids can banish Swiper by saying, “Swiper no swiping.” In the adult world, Swiper represents all those who seem hell-bent on your livelihood.
Swiper is the obnoxious busy-body of a client who has filed a lawsuit against your business in the hopes of getting some extra cash, sometimes hundreds of thousands of dollars in extra cash. The call “Swiper no swiping is Dora’s insurance that she’ll be able to finish her quest unimpeded. You have worked hard to build up your company, so why would you be so willing to let it all go?
Is it a Reason, or an Excuse?
There are a lot of reasons why business owners opt out of getting commercial business insurance, or so they think. They’re really not so much reasons as they are excuses. Here are 10 reasons, aka excuses, why business owners decide against getting business insurance. Are you guilty of making the same judgements?
Excuse 1: Business insurance is too expensive. False. Business insurance is not too expensive. Comparison websites like CoverHound can help you find cost-effective commercial business insurance packages without you breaking the bank.
Excuse 2: My company doesn’t need business insurance. False. Every business needs business insurance. An inexpensive coverage plan that will meet all of your needs is the business owner’s policy or BOP insurance. BOP insurance offers liability, crime, fleet and property insurance protection under one affordable bundle plan. And did you know that when you bundle, you automatically get an insurance discount?
Excuse 3: Business insurance isn’t mandatory, so that means it’s unnecessary. False. Did you know that there is a 12 percent chance on of your own staff members will sue your business? Did you also know that 36-53 percent of small businesses are involved in some form of litigation in any given year? Business insurance as seen in the general liability and professional liability policies will cover the cost of your litigation fees and damages. If an employee or client took your business to court tomorrow and the judge ruled in their favor, would you be able to pay restitution out of pocket? Would you be able to hire a decent lawyer? If your answer is no to either one of these (or you’re even just not sure) you absolutely must get business insurance.
Excuse 4: My business is in a stable financial position and I have a loyal customer base, nothing bad is going to happen. False. Even if you have ironclad contracts with your clients and employees that you think makes it impossible for them to take you to court, there is always a loophole. Ever hear of arbitration? Any capital you had can and will go to the costs of retaining legal counsel.
Excuse 5: I had business insurance and never used it, so I let it expire. While you may not have used your business insurance, (yet, at least) that doesn’t mean you won’t need to in the future. Renew your policy and ask about discounts or incentives, this will keep you in the green and happy with your coverage.