Whether you have a startup or a long-established business, you’ll want to protect it. There are so many risks associated with running a business and you want to know that it’s safeguarded in case of a lawsuit, a settlement or any other damage that it faces. And this is where business insurance comes in.
But although business insurance undeniably has its benefits, there are a few things to consider about it before taking the leap and investing in the cover. If you currently don’t have business insurance and are wondering whether it’s the right move for you, here are the top pros and cons associated with it:
Let’s start with the pros:
1.There is Variety of Types To Choose From
One plus point of business insurance is that there is a variety of different types to choose from. From management liability insurance cover to property liability cover, workers compensation, business interruption insurance, etc.
This gives you the flexibility to choose the cover that suits you. Often, businesses will opt for several different types of insurance or a package which offers them three or four types in one.
2. It Will Help You To Save Money
A huge benefit that comes with investing in business insurance is the fact that it can save you money in the long term. Protecting you from a range of unforeseen circumstances, you can have peace of mind.
Whether it’s covering the cost of a claim made by an employee, the cost of any property damage, or another issue, you won’t have to foot an expensive bill at the end of the process (unlike if you didn’t opt for the insurance).
Offering you an efficient and quick solution, you won’t have to worry about the financial implications of downtime. Many businesses around the world recognize this benefit and how much they will be able to save from it.
3. It’s More Appealing to Investors
When you have business insurance, your business looks a lot more appealing to potential lenders and investors – a benefit that startups will love. Providing a certain financial guarantee, investors will know that the business assets are protected in case of an incident. They will, therefore, be more likely to do business with you.
Now, onto the cons:
1. It Can Be Expensive
One downside to business insurance is that it can be expensive. As a business owner, you’re continuously looking for ways to budget out your costs every month – and the costs associated with business insurance might be too much for a smaller business.
Of course, there are ways that you can bring this price down; you could either focus on particular parts of your business that need protecting, review and change your policies ever so often, etc. However, you’ll want to make sure that the key parts of your business are covered – otherwise, the overall expenses will increase.
2. The Pay-out Can Be Slow or Non-Existent
With business insurance, at times, certain claims won’t be covered under your policy. If this occurs, then you’ll not be able to reap the benefits that you expected. When the claim is particularly complex, however, the provider might agree to pay-out to you, but it will take a while to process.
This is because the company needs to fully assess the claim and determine the exact cover they will provide you. In this time your business could suffer huge financial loss and other implications.