Business Management ABCs

Who Needs Business Insurance?

Many business owners often wonder if they do in fact need business insurance. The answer to this common question is a resounding “yes”. Anyone in the legal profession will vehemently endorse business insurance coverage for any sort of business. This insurance coverage protects business owners for many different risks to their business. There are a lot of different lines of thinking out there, on the part of business owners, which provide them with justification for not taking out business insurance. However, there are just as many solicitors out there explaining why they are wrong.

Some business owners believe that they will never be sued. They see their business as one that does not make a lot of money and they feel that no one can successfully sue them because they do not make enough money to actually be collected in a legal settlement. However, these people really do need to have business insurance because any business can be claimed against. Even if the business does not have the amount of cash awarded in a settlement, a lien can be placed against the business. Non-liquid assets can be seized and sold off in an attempt to pay off the settlement. However, by having business insurance, businesses are protected in the event a suit is brought against them and the business is ordered to pay.

Other business owners justify their decision to not obtain business insurance by the fact that their business is incorporated. They feel this is enough to protect them from any sort of liability. Actually, all this does is protect someone personally from the action of the corporation but the corporation is still in fact liable as a business. However, in some situations even the personal assets of an owner are not protected. Having business insurance for the company would keep this from occurring.

Many business owners fail to take out business insurance because they believe that in the event of their death, their family and the business partners can just come to a solution. However, without business insurance, most businesses are unable to weather the death of one of the primary owners. In many cases, the business goes under.