Small businesses work on a tight budget, but this doesn’t mean owners should ignore proper insurance coverage. Avoiding risk doesn’t make it disappear and the implications of poor insurance coverage are far-reaching.
Here are a few reasons why insurance is vital for your Massachusetts small business.
Lawsuits are Very Costly
All it takes is a single accident or injury, one disgruntled employee, or a contract dispute to trigger a lawsuit. Claimants have up to 3 years to file personal injury and product liability lawsuits too and they occur more often than you might think. In 2017, lawyers filed over 18,000 civil cases in Massachusetts alone.
Six and seven figure settlements aren’t unusual, plus steep legal fees since lawsuits often take years to settle. Few small businesses could withstand these costs. A general liability insurance provides financial protection from lawsuits and legal fees resulting from bodily injury or property damage.
Property Losses Can Cripple Small Business
A fire, flood, or other peril could destroy some or all your property and interrupt your operation. Could your small business afford to replace these items or survive without income?
In Massachusetts, business owner’s policy bundles many coverages under one premium. Typically, it includes property, general liability, income loss, and compensation for normal operation expenses such as rent and utilities. However, your insurance agent can tailor your policy to your specific needs.
New clients may ask you for a Certificate of Insurance before they work with you, especially when liability and large loss are a concern. If your business provides a service, you need proper insurance for potential clients.
Your Location Requires It
A small business that leases or rents their building needs insurance since the landlord does not cover you. If you work from home, your homeowner’s insurance policy may exclude or severely limit coverage.
Lenders Demand It
Most lending agreements demand insurance to protect their investment. If you want to borrow money for property, equipment, or operations you’ll need proper insurance.
Protects Key Stakeholders
If your small business is your primary source of income, what happens if you can’t work? Proper insurance can compensate for your loss of income due to disability or funds to buy out a key stakeholder’s interest if they’re disabled or die when they’re insured too.
Insurance can also protect the directors and officers of your organization from the costs associated with a lawsuit.
In today’s computer-oriented world, data is often one of a company’s most valuable assets. Lost or breached data can lead to business interruption, lawsuits, hefty fines, and substantial costs to notify clients, retain clients, and restore operations. Cyber liability insurance policies can help offset these costs.
Cares For Employees
Whether your small Massachusetts business has a few employees or a large organization with many employees, they are valuable. You can’t generate revenue or grow your business without them, so protecting them from the consequences of accidents or illness makes sound business sense.
Providing adequate benefits is also a strong signal to potential employees that you’re a great employer. After salary, top-notch employees look at things such as health, life, and disability insurance before they accept a job.
No one can predict the future, but you can protect your small business from risk. Discuss your needs with your Massachusetts insurance agent so they can tailor coverage to address your most relevant risks. They can provide you with affordable coverage so you can have peace of mind and focus on your business.