When starting a business cash flow is usually tight, unless you are backed up by a deep-pocketed investor. Getting business insurance is almost never a priority as most of the business spending go into renting the place of business, buying computers and equipment, hiring employees, marketing, stocking inventory, and others. While investing in these are necessary, it’s also equally important to protect your investment by purchasing a business insurance policy.
Now, it’s natural to feel a bit unsure about spending money on protecting a business that’s yet spread its wings. However, that’s probably the most important reason to get a policy from one of the more reputed business insurance companies out there. Unlike an established business, a startup has limited cash reserves. This means when things do go wrong, they simply lack the capital to recover. In an attempt to recover from a disaster, you may be forced to bring in additional investors and lose equity in the process.
Without It, Your Business Can Go Bankrupt
Imagine this scenario. You spend thousands of dollars setting up your office and renting properties to get your business off the ground. You spend time, money, and effort to hire skilled employees. All your efforts start paying off as your business starts to generate revenue. Before you can get comfortable a fire breaks out and destroys all your business assets. Your business operations are temporarily halted and you have no cash to reinvest. Fearing a loss of employment your employees leave hastily. The domino effect of a single event leads your business towards bankruptcy. All your ideas, effort, and investments are lost just because you undermined the importance of property insurance.
Considering that a standard BOP which includes property cover costs less than $1,000 per year, you could have avoided this quite easily.
Basic Business Insurance Packages for Startups are Usually Affordable
Business insurance premiums for small startups are usually pretty low and rightfully so. Startups usually have limited assets to protect, which means you can easily get away with policies with smaller coverage amounts. For example, if your office has $50,000 worth of equipment and inventory, there is no point in getting coverage of $100,000. Small businesses also have limited staff members, so getting coverage for your employees should also be affordable. There is no point in overspending on insurance when your business assets are limited as you can always scale it up as your company grows in the future.
Getting Certain Types of Insurances Maybe Legally Required
Getting certain business insurance policies may not be optional. Depending on the industry you may be legally required to purchase certain types of insurance policy. In general, getting a workers’ compensation policy is legally required if you hire even a single employee. This insurance protects your employees by providing them compensation for any workplace injuries or harm.
Insurance Packages Can Be Tailored to Fit Different Industries
Instead of thinking of business insurance as a bad investment, think of them as ways to minimize business risks. Thankfully, business insurance companies are willing to meet you halfway. Most companies have insurance products designed for specific industries. This means the risks that are most relevant to your business operations get covered and the ones that are not are left out.