Owning a business is simultaneously one of the most stressful and the most rewarding things that a person could ever do. Many people talk of starting their own business but never go through with it, but those who do will actually understand that starting a company takes much more than just wishful thinking. What even some of the most business savvy owners overlook, though, is proper business insurance. This could prove detrimental to a company, so it's important for budding entrepreneurs to understand exactly why insurance is so essential.
1. Automobile Accidents
Any business that involves driving, whether it be a pizza delivery shop or a plumbing company, needs to have commercial auto insurance. This will help protect them in the event that one of their company vehicles is involved in an auto accident. When an employee or the owner is at fault for one of these incidents, an injured person could sue the company for compensation.
Sadly, many business owners think their personal auto insurance will cover these costs, but this isn't correct. In fact, if a personal vehicle is being used for business purposes and is involved in an accident during the course of that business, the insurer will likely not pay out if they find out about it. This is why commercial auto insurance is so imperative.
2. Injuries to Members of the Public
General business liability insurance is also essential due to the risk of a member of the public being injured. As one NYC accident lawyer states "Citizens have a duty to each other to exercise reasonable care to avoid causing injury, while companies that produce products and professionals that provide service also have an obligation to make sure they don’t create an undue risk."
If a person slips inside of a store due to a leaky roof, for instance, the company will likely have a lawsuit on their hands. If they don't have general liability insurance to cover these court or settlement costs, they'll have to pay for it out of pocket; and this can financially ruin a company.
3. Worker Injuries
Insurance is also important due to the potential of worker injuries. If a company doesn't have worker's compensation insurance and an employee is injured while doing their job, a lawsuit could quickly bring the company to its knees. Even if an employer does have this insurance, though, it's still possible for them or even the insurance company to fight a claim related to a worker injury. This doesn't mean, however, that they'll be successful.
Injured workers who are denied compensation benefits can actually file a lawsuit against their employer if they're denied benefits. They often hire worker's compensation attorneys who can in turn increase their chances of recovering more benefits than they initially would have. This is one reason a business owner should know the laws of their state. An employer in some states, for instance, may only have to cover certain employees. In other states, however, such as New York, it's possible that an employer may even be responsible for compensation to injured subcontractors or temporary workers. In this case, retaining a local lawyer such as a NYC accident lawyer for advisement would be essential.
4. Data Loss
One of the biggest problems for companies these days is the threat of data loss. The recent case where hackers infiltrated Target and stole millions of credit and debit card numbers shows just how big of an issue it has become. It's important to note, though, that even small companies can experience data breaches. Unfortunately, if they don't have insurance to cover these occurrences, they could end up paying for credit monitoring services and legal claims all on their own.
Keeping a company afloat is definitely a hard task, but a business owner who negates the proper insurance makes that task much harder on themselves. Luckily, this isn't a lesson that an employer has to learn the hard way. By simply discussing their potential needs with the appropriate insurance companies, a business owner can do themselves, and their business, a great service.