When you own a business, you work hard every day. Some people work well into the night as well. One of the reasons that there are different business insurance policies available is to protect your business and mitigate any risks. One accident can sink your business, but insurance can prevent that. There are several different unforeseen circumstances or accidents that can cause financial ruin. Here are the top eight potential costs of doing business without insurance coverage.
Fire Damage
If your business suffers from a fire, it can be difficult to recover if you don’t have insurance. If you have inventory, office furniture, technology, and other items, they can all be lost in a fire, and you will have to pay out of pocket to replace them. Even if you are leasing and your landlord has property insurance, it will only cover the building. It will not cover your inventory or other possessions. Fire damage is a risk that you don’t want to take.
Water Damage
Another risk you take when you don’t carry business insurance is suffering from extensive water damage. Water damage can happen during extreme weather or flooding, but it can also occur if someone leaves a sink or bathtub running. In the winter, pipes can burst if they freeze from having the heat turned off. There are many different causes of water damage, and having insurance protects you. The risk you take is losing anything damaged from the water.
Business Interruption
Another cost you may have if you don’t carry insurance is the loss of wages and income during a business interruption. This type of insurance will cover your operating expenses and lost income if you are unable to have your business up and running due to a technology failure, a natural disaster, or some other reason. Most business insurance providers offer business interruption insurance, which can be helpful if you cannot absorb the cost of being forced to shut down operations for some time.
Customer Injuries
If you don’t have business insurance and a customer slips, falls, and breaks a leg, you may have to pay their medical bills. If they decide to sue you, you will need to hire an attorney and defend your company against the lawsuit. This can cost a great deal of money, and they may win a judgment. Having insurance means that you are covered, but if you don’t, it can cost you a significant amount of money. Insurance of this kind is especially important in lines of work where customers are put in situations where pain is likely to happen. Businesses such as piercing shops for instance will require reliable piercing insurance in order to ensure that clients who suffer an extraordinary injury from the piercing process are properly covered, as regular insurance might not cover the idea of piercing clients and putting them in pain as part of the regular process.
Libel and Slander
Another potential cost of not carrying insurance is being accused of libel or slander. This could happen if someone affiliated with your business says or writes something disparaging about a competitor. The competitor may sue you, and you will have to pay legal fees, and if you lose the lawsuit, you may be forced to pay the competitor for the injury they suffered. When you have insurance, they will cover the cost of your legal defense and any judgments or settlements you may be forced to pay.
Cyber Attacks
As technology continues advancing, more businesses are using it for multiple functions. In addition, you might store customers’ personal information and other data. Cybercriminals are always looking for opportunities to steal this information. A data breach can injure your reputation and make customers suspicious of you. Hackers also use ransomware to shut you out of your system, and you may have to pay a significant amount to gain access. You can get cybersecurity insurance to protect you from these situations. They will pay the ransom and pay your legal fees if you are sued for a data breach.
Lease Commercial Space
If you need to lease commercial space for your business, the landlord may require that you carry business insurance. If you don’t have insurance, you may be limited in where you can have your business. If you work from home, you still have liabilities. For instance, if you have a courier coming to deliver business documents, you can be held responsible if they slip. They may sue your business, and your homeowner’s policy may not cover it. You open yourself up to risks if you don’t have insurance to cover these types of accidents.
Inventory
If you don’t have insurance and anything happens to your inventory, you will have to replace it yourself. This can be very expensive and is the final straw for some businesses. When you work hard, you need to protect your inventory so that you have it to sell to your customers and keep your business running and growing. Insurance will cover your inventory in case anything happens to it. This is important so that your business can continue operating.