Whether you’re just starting out your new business or growing your business by leaps and bounds, you’ve probably had this question cross your mind:
“Do I really need business insurance?”
We get it. Depending on the industry you’re in, business insurance can be a pretty significant expense. If you’re just starting out and watching your budget very carefully, you might be tempted to put off buying a policy until you really need it.
So, when it comes down to it, is business insurance an absolute necessity? Or can you get by without it?
The answer is, it depends.
While some types of insurance may not be necessary to your business, other policies may be required by your state. For example, if you hire your first employee (even if they’re part-time or a subcontractor), you’ll probably need workers compensation insurance.
As another example, if you work as a contractor, many states require you to have general liability insurance in order to get your contractor’s license. Many clients require a Certificate of Insurance (COI), especially if it’s a high-risk job. They want to check that you have insurance and enough coverage in case something goes wrong on the job.
But small business insurance shouldn’t be seen as just a legal necessity.
In fact, business insurance can make all the difference in landing a huge project or convincing a customer to choose your business over your competition.
1. It shows customers you’re dependable.
This is especially relevant if a customer is hiring you for a project that takes place in their home or office. Very few customers want to work with a business that can’t produce licensing, insurance, or any other info that validates them.
2. It gives you more credibility as a business.
Want customers to take you seriously? Carrying insurance is a clear signal that you own and operate a credible business - and that you genuinely care that everyone is protected while you work.
3. It can help you recruit talent.
Hiring top talent can be a huge source of frustration for small business owners. Carrying insurance can make it a little easier to get the employees you need, as you’re demonstrating that you put their safety first.
Besides, if you don’t carry insurance and an employee gets injured while working for you, your business could be on the hook for a lot of money.
4. It puts less stress on your personal finances.
Without business insurance, one incident or lawsuit could not only wipe out your business finances but your personal finances as well. You’ve worked hard to create a good life for yourself and your family; business insurance can help it stay that way.
5. You won’t be vulnerable to one bad stroke of luck.
Accidents can happen - and sometimes, they can happen to the best of us. Even the most careful small business owners could find themselves victim to some serious bad luck, like in the event of a major storm or an unexpected accident.
Without business insurance, you and your family could be vulnerable to any random bad luck, as you’ll have to pay for damages, repairs, and even lawsuits out of your own pocket.
Business insurance may feel like one of those things you begrudgingly have to get, but there are actually serious benefits to having a policy on your side. If you want to grow a successful business - all while keeping yourself and your family protected - it pays to get insured.