Running a business comes with risks. A client or customer could sue you for the damages caused by your services or products; your stock may be stolen, or a serious storm can ruin your work premises.
All these events lead to enormous financial losses which can hurt your business. Even worse, you may have to close your business.
That is why commercial insurance is important to protect against such events. Commercial insurance can cover many risks such as damages caused by your product or services, injury to a client or visitor and property damages. It is even important if you have 2-3 employees.
Here are some convincing reasons why your company needs commercial insurance.
Covering against Claims and Lawsuits:
A defect in your product or negligence in your service can be costly for your business. For example, your employee might damage a client’s property during a renovation. Or you can accidentally break the expensive vase while painting the wall. What if your software ruins your client’s database?
Business operations are highly vulnerable to risks. But not all customers are forgiving, and they can sue you for the damages or injuries caused by your products or services.
And it means you need to defend your case. To defend your business, you have to fork out a huge amount of money. It can cause financial hardships and make you cash-strapped, let alone if you must pay out compensation.
Commercial insurance is important to deal with such scenarios. Generally, they may cover your lawsuit fees as well as the compensation. For example, professional indemnity insurance may cover legal costs and claims arising from loss or damage due to your advice or services. Public liability insurance can offer protection against claims of injury to a client, or even supplier, and property damage due to your business operations.
Minimizing the Risk of Business Interruption:
Many things can hinder your business operations. It can be the breakdown of machinery or natural event that has destroyed your workplace. Sometimes you may have to relocate to a new place.
Here comes Machinery Breakdown cover and Business Interruption Insurance that may cover loss of income, as well as other expenses.
Showing Your Credibility:
Having the suitable insurance not only protects your business, it also establishes your credibility amongst customers. Today’s customers are savvy and aware. They want businesses to be transparent and honest. Some of them might request you to show any proof of insurance before engaging your services.
For example, they may be more likely to prefer an insured contractor for the remodelling of their home
Ensuring Peace of Mind:
With business insurance, you feel less worried knowing that there is a suitable policy to cover your emergencies. This way, you can focus on the core line of your business and work on the factors that help win and satisfy clients.
Commercial insurance can save your business from financial crisis if emergencies occur, and even if nothing terrible happens, insurance can help promote your growth as it enhances your credibility and provides you with peace of mind.
However, it is important to choose the right insurance plan for your business. Assess your risks and work with an experienced broker or insurer for your industry.
One more thing—if a claim occurs, approach your broker or insurer as soon as possible so that it can be scoped immediately. Commercial claims can be more complicated than other claims, so quick assessment is important, especially in high-cost liability claims.
*Important: Cover may be available subject to meeting insurers underwriting criteria. Some of the covers listed may or may not be available or may have limitations or exclusions. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.
Romit Malhotra is the brand representative of Smart Business Insurance, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.