8 Risks You Take By Not Having Commercial Insurance

Entrepreneurs know that running a business comes with risk. However, some risks can be mitigated through purchasing insurance. Yet, not every business owner maximizes their options for commercial business insurance. Failing to acquire the proper coverage could lead to devastating financial losses that would otherwise be avoidable. Not having commercial insurance sets your business up for a risky future that could ultimately end your business. Here is a look at eight serious risks when not buying commercial insurance.

1 – Lawsuit Woes

Anyone can sue a commercial business for any reason, with negligence being a top reason. Without an insurance policy, a business owner must pay for legal expenses out of pocket. Many policies typically cover legal representation. In addition, an insurance settlement would cover losses when the business is liable. Without the policy paying the obligations, financial devastation may result.

2 – Losses by Fire and Natural Disasters Go Uncovered

A commercial policy could cover the financial losses caused by a fire that ravages a business. Natural disasters could also lead to serious problems, such as floods or wind damage. Replacing an entire roof can be costly without the proper insurance in place.

3 – Dealing with Human-Caused Events

Natural disasters are not the only things to worry about. People can cause a lot of problems, too. Vandals, for example, may smash windows and create other expenses, resulting in losses. The same applies to shoplifting. Commercial insurance may cover these losses.

4 – Coverage for Loss of Use

If a fire or storm causes a business to close, the company cannot generate revenue. With loss-of-use coverage in place, the business owner may file a claim when the business is inoperable. While the insurance settlement might not reach the same level as profit potential, any money derived from the policy would be better than nothing.

5 – Cybersecurity Matters

Commercial insurance could also cover losses related to cybersecurity mishaps. Sometimes, clients may have legitimate claims if a company does not take steps to protect their information from breaches. That is one of many different costly cybersecurity catastrophes a business could face.

6 – Protection from Employee Liability

No matter how conscientious and safe a manager is, management cannot always prevent employee misconduct. Commercial coverage that addresses the losses potentially absorbed by an employee’s behavior can protect a business.

7 – Losses to Third-Parties

When a delivery truck accidentally crashes into someone’s fence, expect the delivery driver’s employer and the commercial fleet’s owner to face claims. An insurance policy can step in when such claims arise. A business owner cannot be everywhere; even if they could, they cannot entirely prevent third-party losses. Take that as a solid reason why insurance policies are so vital.

8 – Reputation Management

Businesses that end up facing litigation may suffer reputational harm. Long, drawn-out court cases and new reports of massive financial judgments can cause troubling public relations nightmares. A fast and quiet insurance settlement may prevent such issues.

Finding the right commercial insurance policy works in a business’s best interests. Reviewing quotes closely to ensure that maximum coverage provides comprehensive protection seems advisable.