Commercial insurance is, understandably, something that many business owners avoid. We explain the risks with putting off this important safeguard.
As a small business owner myself, I understand the risks of starting a company, going without a paycheck, and potentially losing everything. Business owners are a highly motivated and tenacious breed of individual who have a hard time working 9 to 5 to fulfill someone else’s vision. Taking steps to put in place protective measures that make sure you can live to fight another day is an important part of going into business for yourself. Specifically, commercial liability insurance is something that is dangerously overlooked and put on the back burner by many business owners. Understandably, business insurance seems like an expense that will rarely provide any value. However, I am here to tell you that it can and it does. These are the 3 greatest risks business owners are exposing themselves to when they operate their company without insurance.
account_balance Legal Non-Compliance
There are are variety of local, state, and federal laws that require businesses of all types be insured for various exposures. The industry you operate in may also create unique insurance requirements. Non-compliance with these requirements or regulations by failing to obtain the proper mandatory insurance can quickly get you in the hot seat. Some of the penalties can include heavy fines, revocation of licenses required to operate, and being forced to cease all operations. In some industries and cases, the business owner may even face jail time. So make sure you are aware of all insurance requirements and adhere by them. In most cases, the total yearly insurance premium is far less expensive than the potential fines and obviously a lot less damaging than losing your business.
money_off Personal Bankruptcy
Many business owners run their company as a sole proprietor or a single-member limited liability company that doesn’t follow proper corporate compliance. While often the quickest and most cost-effective way to get up and running, with these structures, liability from business activity flows directly through to the business owner potentially compromising the business owners personal assets. And while there are other corporate structures that provide greater legal protection and separate liability from a business and its owner, they still don’t prevent someone from suing you personally. Commercial liability insurance not only protects the business entity but it also protects the business owners and employees. Each day lawsuits are filed against not only companies but against individuals who work and own those companies. As a result of this exposure, if you operate without business insurance and you are personally named in a lawsuit, your personal assets are at risk.
block Loss of Customers
If you have customers that require a contract to be signed before services can be performed or products delivered, chances are those contracts will contain insurance requirements. If you don’t adhere to those requirements, then you risk losing that customer entirely. Even worse, because the traditional process of purchasing insurance can take several weeks to complete, waiting until the last minute to obtain contractually mandated insurance will probably result in losing the customer as well. It’s always best to have at least basic business insurance in place before going out and soliciting business so that as new insurance requirements come up, you’re simply adjusting existing coverage to meet the new requirements rather than starting from scratch.
If you’re currently operating a business without any insurance or without the proper insurance, the good news is that it’s never to late to get coverage in place. Our online business insurance platform was specifically designed to enable small business owners without insurance to quickly and easily purchase the right insurance for their business while paying for it monthly on a credit card. If insurance is something you’ve been putting off, please consider taking a look at our offering. It’s most likely easier, faster, and cheaper than you thought.