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Reasons to purchase business insurance

By Compuquotes Team on July 18th, 2008

Business Insurance

Business insurance can be a major purchase for a business owner to make, but when it comes down to it there are a number of good reasons why they should buy it anyway. Too often business owners look at the cost without realizing the benefits, and then are left with serious problems that the insurance would have easily covered. If you're a business owner and are trying to decide whether or not you should buy business insurance, consider the following reasons why it would be a good idea.

  • Reducing liability

One of the biggest advantages of business insurance is that it can reduce the liability of your business in case of accidents. The insurance that you take out will generally cover any liability lawsuits up to the maximum amount stated by your policy, and will allow you to continue using your business cash flow to keep things running even if you are facing a liability suit.

  • Loss recovery

Theft, damaged goods, vandalism, and even natural disasters can all result in financial loss for your business. Without business insurance you'll be left paying for repairs or product replacement out of your business funds, which can severely hurt your business and leave you lacking things that you need. Your business insurance can cover the cost of loss recovery without you ever having to touch your business finances.

  • Legal requirements

Though many people don't realize it, worker's compensation is paid from a type of business insurance that most businesses are required to have. Provided the business is large enough to meet certain legal requirements and isn't of certain types that are excluded from the law, there can be stiff penalties placed on any business that doesn't have the required insurance. To make matters worse, businesses without the proper worker's compensation insurance will still be required to pay for worker injuries in addition to being fined for not having the legally-required business insurance.

  • Securing loans and investments

Lenders and investors always want to make sure that their money is safe, and will more often than not require that business insurance be purchased before they will consider lending or investing in any company. If you don't have the proper insurance and aren't willing to take out a business insurance policy then it will be much more difficult to secure funds for business expansion, renovation, and growth. Those lenders who will give you the money that you need without insurance will most likely charge you inflated interest rates to make up for the additional risk of lending to an uninsured business.

  • Improving business image and stability

Depending upon the industry that your business is a part of, it can significantly improve your image to have certain types of business insurance. Being insured shows potential customers or clients that you're protected from sudden loss and that your business is more stable and secure than those which don't have insurance. This can lead to an increase in business and greater income because more of these clients and customers will choose your business over competitors who aren't insured.

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