Yes, you need insurance for small business owners for the unavoidable and unforeseen factors that could cripple or destroy your business.
Remember, your general household insurance may not cover your business, so you may need to consider getting a home business insurance quote.
Depending on your business, the types of insurance cover you should consider are:
- Fire, theft and accident cover for your business property and vehicles.
- Business liability cover is to protect you if someone gets injured due to your services or product, liability due to negligence resulting in injury or the costs if a lawsuit should arise.
- Business interruption cover – if you have damage to your business property resulting in a decrease in your income, this will cover the financial gap.
- Life insurance and income protection for yourself. As a self-employed person, you should cover any health risks with income protection and life insurance to cover any liabilities if you should die unexpectedly (not leave your family with a financial burden).
- Key person insurance for partners – should a partner become disabled or die, this insurance compensates for the financial loss of that person.
- Buy/sell insurance for partners – if one partner becomes disabled or dies this provides the remaining partner or partners with finance to buy the shares of the disabled or dead partner and continue running the business.
- If you have employees, workers’ compensation insurance should be considered.
There is no standard insurance cover as every business is different. It is recommended to get advice on what type of insurance is best for your business.
Do not buy a policy and then file it away somewhere. Review your business insurance at least once a year to make sure it still meets your business needs.
Although you cannot predict unforeseen disasters, you can manage your risks to reduce the likelihood of accidents. Explore and identify potential risks for clients and employees and set up safety precautions to reduce the risk of accidents and potential future claims. Ongoing monitoring and evaluation of these safety precautions will assist in reducing claims.
If you think you cannot afford insurance, think of what it would cost you if you did not have insurance cover. Can your business survive?
Better safe than sorry.
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