One of the toughest decisions you will have to make as a business owner is the insurance you will get for your business. Start-ups are generally risky areas to deal with – some threats anticipated, others may come up as you attempt to grow your business, and some can make your business come to a grinding halt.
It can be very painful to sacrifice your time and resources to grow your investment and customer base, only to see it crash after some time due to risks. It actually takes a lot more than expected, especially on you as the owner. The journey of entrepreneurs is that of a roller coaster. Unpredictable and rough, going through setbacks and triumphs. Precautionary measures can control many of the challenges you face. After all, it is better to be safe than sorry.
Does an entrepreneur need insurance?
Insurers today offer protection to businesses against business risks, which can include physical threats like fires to premises, or even other threats like lawsuits or social media mishaps. This can help you relax, knowing that someone else will handle it when things go awry and help you get back on your feet.
Insurance companies generally focus on low-risk and bigger businesses. According to MyOperator founder Ankit Jain, it does not make any sense for a start-up investing in certain areas to have insurance firms giving covers. Good cash flow management is what start-ups should focus on at the initial stages.
What about high-risk ventures?
Insurance firms may not like the idea of investing in high-risk areas, including startups. However, this can actually provide protection to these areas and in the process, make them more enterprising and mobile. Once your business gets an insurance cover, you will be free to take better decisions for your organization as another company will handle the fear.
General liability insurance suchas offered by slip and fall lawyers is important for business even at their earliest stages, and it covers legal fees resulting from accidents, negligence and injuries. An injured party could sue you for an unfortunate incident in your premise.
Many startups do not initially move into a commercial space. What about when you are working from home? Entrepreneur points out that your homeowner’s insurance alone may not help you deal with risks associated with your business. Your organization will still need liability coverage with it.
One of the headaches of starting a business is the equipment they need to function. When you have physical property, you will need to insure them under your business plan. Risks to property can include hail, smoke, fire, vandalism and civil disobedience. Many commercial policies can also cover lost income resulting from damage to property.
While most large organizations have risk-management experts to identify and develop strategies to cover various risks, start-up entrepreneurs have the responsibility of risk management.
Because the financial consequences of disruptions aredetrimental when it happens to small and medium businesses and start-ups, businessinsurance can help to provide protection against possible losses and business risks such as vandalism, natural disasters, false advertising and theft.