5 Reasons Your Business Could Fail Without Business Insurance

"5 Reasons Your Business Could Fail Without Business Insurance" two Businessmen Under a Red and Yellow Umbrella Graphic

~by Hannah Whittenly~.

Regardless of the size or location of your business, not maintaining the proper business insurance is a risky move. From catastrophic events to employee lawsuits and more, your business must be protected at all times.

Even if you’re experiencing an enormous amount of success, if you don’t have the proper business insurance, the following 5 reasons are why you could lose it all.

1. Major Lawsuits

Lawsuits are more common than people think, especially among small businesses. Even the slightest issue brought up by a customer could lead to a major lawsuit, potentially in the millions of dollars. Due to that, business insurance can offer protection against lawsuits, and could protect you from going bankrupt.

2. Catastrophic Events

All types of businesses need to be protected from catastrophic events, from dance instructors who own a small studio to large construction corporations. Such catastrophic events include building fires, floods, earthquakes, and more.

Businesses without the right property insurance policy could be in for a big surprise, and should always be prepared for the worst possible scenario. If you end up losing your most valuable business asset, your business will go down as well.

3. You’re Legally Obligated to Have it

Some insurance policies are required by state law, one of these being worker’s compensation insurance — which is often included in comprehensive business insurance coverage plans. It provides medical benefits to employees who are injured on the job. In return, the employee cannot sue the company they work for, unless gross negligence was involved. These types of policies are not expensive to purchase, and the penalties for not carrying worker’s compensation are steep.

4. Major Data Breaches

If your company stores a large amount of private user data on servers or in the cloud, you’re at great risk for a data breach. At some very well-known retail chains, such breaches have caused quite a stir, and people have received millions of dollars in compensation. Purchasing a business insurance policy that helps protect against such breaches will keep your company afloat should the day ever come.

5. Personal Financial Liability

One of the biggest worries for business owners is whether or not their personal finances are at risk. While forming a corporation will help protect you and your family from creditors if the business goes south, any wrongdoing or negligence uncovered will reach beyond corporate limits. A business owner’s policy or other type of business umbrella insurance can help protect your personal finances.

Like a doctor trying to protect against lawsuits with malpractice insurance, business owners must do the same. A lawsuit or catastrophe could be just around the corner; protect your business with the right insurance as soon as possible.


5 Reasons Your Business Could Fail Without Business Insurance 1

Hannah Whittenly

Meet the Author: Hannah Whittenly

Hannah Whittenly is a freelance writer and mother of two from Sacramento, CA. She graduated from the University of California-Sacramento with a degree in Journalism.

Categories

All Categories

Business Operations

Entrepreneur Interviews

Marketing, Networking, & Social Media

Self Care & Personal Development

Working Moms

Business Software and Technology

Entrepreneurship & Small Business

Organizing Tips

Sales

Career Building

Family Businesses

Inspiration

Starting Your Own Business

Work-Life Balance

Communication

Hiring Help

Management & Leadership

Time Management & Priorities

Women in Leadership

Recent Posts

Business Blogging 101: How to Create and Sustain a Successful Blog

Business Blogging 101: How to Create and Sustain a Successful Blog

For businesses, business blogging is becoming a powerful tool to not only attract and engage new customers but also to build brand authority and ultimately grow your brand.
This comprehensive guide will equip you with the essential knowledge and strategies you need to start and succeed in the dynamic world of business blogging.

How to Protect Your Merchandise From Theft

How to Protect Your Merchandise From Theft

Protecting your merchandise from theft is a critical aspect of running a successful business. In a world where security threats are ever-present, safeguarding your inventory is essential. Not only does it protect your bottom line, but it also ensures the safety of...

Experts You Need to Have at Your Business

Experts You Need to Have at Your Business

In the dynamic world of business, having the right team of experts is not just beneficial; it is essential for success and growth. For female leaders who are carving out their paths in business, marketing, or HR, knowing which experts to have on board can make a...

7 Tips for Asserting Yourself as a Woman in a Medical Workplace

7 Tips for Asserting Yourself as a Woman in a Medical Workplace

As a woman in a medical workplace, you have a lot of responsibility, not just to yourself but to other women who will come along after you. Asserting yourself in your workplace and gaining the respect of other employees and leadership is essential to a successful career. You have worked hard to get where you are, you don’t want to lose momentum.

Continue to grow with online leadership training and more. Follow these tips to assert yourself in the medical workplace.