When you launch a new startup business, you’ll undoubtedly be aware of several different costs to bear. For some entrepreneurs, those fees include property leasing and hiring employees.
The thing is, some new startup owners believe they can avoid paying for insurance. They feel such costs are prohibitive for a startup like theirs at such an early stage of trading. The truth is, insurance coverage helps you out of many sticky situations.
With that in mind, here are some of the top reasons why your new business needs the correct insurance coverage:
The law demands you have certain insurance in place
Did you know that you could have a legal obligation to have valid insurance coverage in place for your startup? In many parts of the world, local laws dictate businesses must have employer’s liability insurance when they have employees.
If an accident happened to an employee while they were working for you, the insurance would take care of any claims for things like compensation, medical expenses, and so forth. Should you not have such insurance, your business could find itself saddled with huge fines.
You should cover your back
Let’s say that a client was dissatisfied with your work. They might feel that your efforts caused their business irreparable damage, and so they might want to sue your company. What would you do in such a situation? As you know, legal bills can easily skyrocket.
When you have the proper business coverage in place, you’ve got peace of mind knowing your professional indemnity insurance will help defend any claims. And that means you don’t have to panic about paying for expensive legal costs.
You’ll appear more trustworthy
In the B2B world, one of the reasons companies do business with other firms is when they learn potential suppliers have insurance cover in place. It makes startups like yours appear more legitimate because you’re investing money to safeguard your brand.
Another reason insurance makes you appear more trustworthy is clients can rest assured knowing you do things the correct way. Startups that can’t prove they have certain insurance coverage in place are less likely to be kept in high regard by their potential clients.
Insurance can be a condition of trading
Did you know some large companies and corporations refuse to buy from businesses that don’t have certain valid insurance policies? Such requirements can be due to the following reasons:
- Liability in case things go wrong;
- Legislative or industry requirements;
- Proof of commitment.
The last point about commitment is an interesting one when dealing with large businesses. In a nutshell, they want to feel assured you’re not a startup that will disappear into the night and cause their companies frustration and delays.
Final thoughts
As a startup, you’ll have collated a list of ongoing expenses to cover regularly. Insurance coverage is a necessary requirement, both for legislative reasons and to quell trust issues when dealing with a new supplier.
Insurance coverage doesn’t have to be expensive. It pays to research insurers and brokers that can get you the best deals for your needs.
