Most business owners understand the importance of commercial insurance, especially if they have been in business for a while. However, many new business owners may be asking why they need commercial insurance. To understand this a bit better, it’s important to know a few things about what commercial insurance offers.
Legally Mandated Insurance
The first thing to understand is commercial insurance is a general term and it includes a number of different insurance policies, such as liability insurance, property insurance, workers compensation insurance and the list goes on and on. The thing to remember is that in some cases, commercial insurance is legally mandated. For example, workers comp is required by law in most cases.
There are other types of insurance, pursuant to a particular type of business that states may have requirements in terms of the type of commercial insurance the business will need. An insurance agent will be the best person to help a new business owner purchase what’s required legally and determine what extras they might need.
Protecting A Business From the Financial Burden of Legal Action
From a financial standpoint, commercial insurance can be invaluable for a few different reasons. The first reason is that should something happen and an individual brings a lawsuit against the business, the financial repercussions a business may have to face can be difficult. This is true whether that lawsuit stems from an injury, an accident or from negligence. Having an insurance policy can help offset those costs and allow the business to continue, even if the business has to pay a certain amount of money pursuant to a civil court settlement.
If an accident were to happen, such as a break-in, a business facility was damaged because of a weather-related event or perhaps products were destroyed because of a transportation accident, without insurance, a business would have to pick up the tab for any cost related to these damages or loss of products. An insurance policy can compensate the business without undue financial strain.
You may be asking yourself why you must have commerical insurance, and there are many reasons for this. Whether it’s mandated by state or federal government agencies or whether you’re simply looking to protect your businesses finances, there are plenty of good reasons why your business should have multiple types of business insurance.