You insure things that are of value, things you simply couldn’t afford to replace should the worst happen. You buy insurance for your car, your home, and your health. So, it only makes sense that you would also invest in small business insurance. After all, your business is something you’ve poured so much of your time and money into. But, the reality is, that one of the first things to hit the chopping block when a company is working on a tight budget is small business insurance. Skipping out on insurance is one of the biggest mistakes you can make when operating your own business.
It’s Not Worth the Risk
Many business owners see the price tag on small business insurance and think that forgoing what seems like just another monthly expense will save them some money. While it might save money upfront, taking on that kind of risk is completely unnecessary and downright foolish. According to a survey conducted by InsuranceBee, over 90% of small business owners cite financial turmoil as their foremost concern when setting up a business. However, nearly one-third of business owners don’t have insurance to protect their small business from financial fallout.
What is Small Business Insurance for, Anyway?
Insurance is only intended to be used if your business runs into a worst-case scenario, which to many seems unlikely. But, the question remains, why do you need insurance for your small business? There are a number of reasons why you might need to protect your business including:
- You cause damage to a client’s property.
- A visitor gets injured on your business’s property.
- Your product or service causes harm or makes someone ill.
- A disgruntled client sues your business.
- Your place of business suffers a natural disaster such as fire or flood.
- You've levied a hefty fine for not being in compliance with current regulations.
- Your business has a data breach.
There’s a Guide for That
There are many types of coverage available for small businesses and it can be overwhelming to determine what combination is best for your small business. Luckily, InsuranceBee has done the hard work for small business owners and has come up with “The Big Guide to Small Business Risk” to help you make the best decision to protect your business assets. Their guide is more than just an insurance pamphlet. It’s a comprehensive guide that will walk you through everything from risk management, legal structures, taxes, personnel issues, to the protection of physical assets and intellectual property, general liability, cyber risks, and more.
Speaking of Cyber Risks…
One of the most important reasons to protect your business with insurance in 2019 is the looming threat of cyberattacks. We live in a digital world and a cyberattack on any business can be downright crippling. Cybercriminals are increasingly targeting small businesses. Most small business owners think a cyber attack could never happen to them, but with around 85% of all cyberattacks being targeted at small businesses, the odds aren’t good. According to InsuranceBee’s guide, “data breaches are one of the leading causes of small business failure, not only because they’re expensive (sometimes millions of dollars are lost) but also because they lead to a serious breach of trust among customers.”
With more and more business being conducted digitally, all data must be protected. There’s a lot to consider when protecting your business from a cyber fallout, but one of the first things you can do to safeguard your business is to invest in cyber liability insurance. While cyber liability insurance should not be a replacement for good cyber risk planning (i.e. employee training, maintaining an updated and secure network and devices, performing regular data backups) it can aid in a speedy recovery should a cyber incident occur. “The Big Guide to Small Business Risk” states that cyber liability insurance covers things like:
- The cost of investigating a cyber incident.
- The cost of telling customers a breach has occurred.
- Legal fees and compensation payouts if sued for losing someone’s data.
- Defense costs if facing legal action by local or federal authorities.
- Payments of regulatory penalties or fines.
- The costs of restoring IT systems, data, and websites.
- Income lost and extra expenses if a cyber attack prevents the business from operating.
- Credit monitoring for victims of identity theft.
- The cost of reputation management and customer support.
Assuming risk is part of running any business, but when it’s your livelihood on the line, you don’t need to take any unnecessary risks. Protect the future of your business and don’t become one of the 50% of businesses that fail after only 5 years. Check out “The Big Guide to Small Business Risk” by InsuranceBee and figure out what kind of small business insurance coverage will keep you in business for the long-haul.