It costs a lot of money to run a business, and after tallying up equipment purchases, property rentals, employee salaries, and inventory production, you may not be interested in yet another investment. Why bother paying for business insurance if it’s not required by law?
That’s why so many businesses don’t have the insurance coverage they need—and why they’re at risk of significant economic losses or even closure.
While business insurance may seem like just another big-ticket item on your list of annual expenses, it can save your company from financial ruin if disaster strikes. As a Michigan business owner, you need to evaluate your risks, assess your needs, and get the right coverage to protect your company.
What Is Business Insurance?
Business insurance is a category of insurance policy designed to protect your company from the financial losses that can occur during regular business operations.
There are several types of business insurance coverage, including liability insurance, property insurance, workers’ compensation insurance, and commercial vehicle insurance. Another option is a business owners policy (BOP), which packages important types of business insurance—typically liability and property insurance—into one policy.
With the variety of business insurance coverage available to business owners, you can customize your insurance protection to meet the unique needs of your business. Then, if the worst happens, you can rest easy knowing your insurance plan will minimize your financial risk and help cover the cost of property damage, legal fees, and more.
Why Do I Need Business Insurance?
You, your finances, and your business need to be protected. Business insurance provides that protection—and purchasing an insurance policy that covers the needs of your company is the right move if you want to prevent devastating financial loss.
Here are more reasons why you need insurance for your business.
1. Reduce Business Risk
You can do everything in your power to minimize risk, but unfortunately, you can’t control everything, and the worst can still happen. By acting responsibly and purchasing comprehensive business insurance, you can know that you’re covered—creating invaluable peace of mind.
2. Comply with State Laws
Most states have laws requiring business to obtain certain types of business insurance policies. Failure to have the necessary coverage could result in costly fines as well as civil or criminal penalties—any of which could significantly impact the reputation and financial health of your business.
3. Build Credibility
Having the right business insurance coverage gives your company credibility. It demonstrates to customers, clients, partners, and contractors that you take risk management seriously. And, if you are considering securing a loan for your business, having business insurance coverage will help convince lenders of your trustworthiness—making them more likely to do business with you.
4. Protect Yourself from Lawsuits
No matter how careful you are or how much you minimize risk, you can’t prevent lawsuits from happening. For example, a customer may slip and fall while visiting your business, or you might suffer a data breach that causes a client to lose customers. Then you could get sued, which means you’ll be faced with the cost of defending your business (hefty legal fees even if you win and potentially significant damages if you lose).
Business insurance protects you from the financial risk of lawsuits. Instead of going out of business to pay court costs, insurance will help cover the cost of your legal defense.
5. Replace Damaged Property, Equipment, or Inventory
If your business owns property, property insurance will protect it in the case of a covered loss like theft, vandalism, fire, or other disaster. The insurance coverage will help pay for the cost to replace or repair your damaged property so your business isn’t stuck with the bill.
Keep in mind that property is a term that includes computers, equipment, inventory, office supplies, and more—anything that you can’t easily afford to replace needs to be covered by insurance.
6. Support Your Employees
Once you start hiring employees, you are obligated to purchase workers’ compensation, a type of business insurance that covers payments if an employee is injured. Additional types of business insurance, such as liability insurance, disability insurance, and life insurance, will further support your employees—and make it easier to attract talent.
How Do I Find the Best Business Insurance?
Shopping for a business insurance plan can be overwhelming. Follow these steps to get started.
Determine Your Business Needs and Risks
The business insurance coverage your company needs varies greatly based on the industry in which it operates, the type of services provided or products manufactured, whether you own or rent commercial property and equipment, and how many employees you have, among other factors.
By assessing your business needs, you can determine which type of business insurance coverage you likely need to protect yourself from financial risk.
Every state has different laws concerning the insurance coverage required by businesses operating in that state. A local or regional insurance company will have more experience in the laws unique to your area so you can make sure you are covering all your bases.
Read Customer Reviews and Testimonials
Don’t just take an insurance company’s word for it—explore reviews and testimonials from previous or current customers to see if any red flags pop up. Remember that one or two bad reviews in a sea of positive comments may be an anomaly, but a pattern of negative feedback is concerning.
Compare Policies and Prices
After narrowing down your list of insurance companies based on location and customer reviews, start comparing policy options and their corresponding prices. You can eliminate companies offering premiums that you can’t afford, but at the same time, avoid suspiciously cheap insurance plans, which may not fully protect you if you need to make a claim.
Trust the Experts
For extra guidance, trust the experts.
A reputable insurance company will be able to help you decide exactly what types of business insurance coverage you need to protect your company, your employees, and your finances. They can also identify areas of risk you may not have noticed before and stop you from making a mistake that will cost your business thousands.
With expert help, you can trust that your business is protected. Don’t hesitate to reach out to local agents as you are searching for the right insurance policy for your business.
Contact Melton McFadden to Get Business Insurance in Michigan
At Melton McFadden, our experienced insurance professionals can help you choose an insurance policy that protects your business, investments, and peace of mind. We are ready to guide you through the process of identifying areas of risk, finding gaps in your current business insurance plan, and creating a solution that works best for you and your company.
Whether you need to develop a business insurance plan or secure additional coverage for your business, we’re here for you every step of the way. Contact us today or request a free quote to get started.