Cliksource Article Directory

Most business owners work incredibly long hours to build value in their company. And many times they have to make significant sacrifices in order to become successful. Sometimes they don’t even pay themselves a salary when they start because they want to reinvest the company’s cash flow into further growth for the business. But just as growing wealth is important, so is protecting it. Insurance is one tool for protecting what you have worked so hard to build.

Many entrepreneurs fail to properly plan for the proper amount of insurance coverage. In some cases, they don’t even include insurance in their expense projections, with the idea that insurance is something you only have to worry about when you become very successful, when there is plenty of cash flow to pay for it.

Skimping on insurance is one of the serious mistakes start-up companies make, and come to regret later on, just as they often do not get top-flight legal advice when they start, which can cause problems down the line in terms of exposure to potential litigation. Lack of adequate insurance coverage can lead to exposure to all sorts of perils, some that can lead to the failure of the business entirely. We live in a litigious world, and knowing the business is protected from potential harm can give a business owner much greater peace of mind.

Here are some of the ways insurance can help small or growing businesses:

Disability insurance for the founder or key members of the management team. What will happen to the business is a key person becomes disabled and cannot work for a period of time? How will he or she pay their bills until they are fully recovered?

Health insurance is equally important. Because the business owners’ personal assets are often intertwined with the company’s, not being able to pay the bills for a serious illness can cause serious financial difficulties for the owners, which in turn can put a strain on the company’s finances. Offering health insurance is also a way to attract and retain talented employees. Health insurance plans come with many options, such as choices in deductibles, that allow a business owner to provide coverage and still have the insurance be affordable.

Liability coverage is another often overlooked form of insurance. If your company has clients, customers, or even employees on its premises, then the business is exposed to potential liability from accidents that might occur. It could be something as simple as a customer slipping on an icy sidewalk.

Do you sell make and sell products? Then your company needs product liability insurance.

Do you have customers or clients who rely on your advice to make decisions? Then you may need to look into errors and omissions insurance, to protect your company in the event a customer becomes disgruntled and files a lawsuit.

The best approach to business insurance is to sit down with a qualified agent, who works with many different insurance providers, and plan an overall insurance strategy for your business. The agent can help you find the most cost effective providers, and in some cases there are discounts that apply when you get more than one type of insurance from the same company.

As your business grows, its insurance needs will change, and probably become more complex. An annual review of your insurance needs, with your agent, can be a good idea.

Dee Power is the author of several nonfiction books and the novel, Over Time. Find out more about business insurance and other Business Services