I get it. The last thing you want to think about when you’re starting a business is insurance. After all, the very word insurance just conjures up mental imagery of what the worst thing is that could happen to your business.
However, it’s crucial that you get the conversation started now. To answer the question, “do I need business insurance?” you’ll need to take a step back and really analyze your company. I’ll let you in on a little secret though: the answer is probably yes.
Liability Insurance Covers You
Liability insurance is likely the most obvious kind of small business insurance out there — it’s the one that everyone naturally thinks of. Liability insurance is a kind of general umbrella insurance that a lot of different claims situations can fall under.
It doesn’t matter if a customer slips on your property and sues you for his or her medical bill, or if you accidentally make an error as you render service that the customer wants to be compensated for. Different types of liability insurance, like general liability and professional liability, will ensure that you’re covered in either situation.
Income Insurance Replaces Revenue
If your small business income is very heavily dependent on you as a person, then you’ll definitely want to look into income insurance. Income insurance replaces lost revenue if your business has to be halted for any reason. For instance, let’s say that a loved one passes away, and you are unable to operate your business for a period of time. Income insurance can help make sure that your revenues don’t die off completely for that time.
The result is that you’ll still have a little bit of a nest egg to re-kickstart operations off again when you’re ready to go back to work.
Captive Insurance Protects Subsidiaries
If you own a company that owns subsidiaries under it, then captive insurance is a must-have for you. Captive insurance protects the decisions that you make as the ultimate owner of the parent company. This is true even as you’re navigating the various decisions that you make that affect the child company.
If your child company operates in an industry that you’re unfamiliar with, it could be very easy for you to make a wrong decision that upturns the business. After all, just because you’re very experienced in your principal industry doesn’t mean that you’re gonna be the best leader in the child company’s industry.
The right captive insurance program will ensure that no matter if you make a wrong decision here and there, your parent company will still be protected.
Do I Need Business Insurance?
In summary, the answer to the question, “do I need business insurance?” is almost always yes. There are very few situations where your company won’t need to be covered, where it’s liability insurance, captive insurance, income insurance, or some other kind entirely.
To further develop as an entrepreneur, make sure you check out the other lifestyle articles and advice on our blog!