Operating a small-scale business can be difficult. In the midst of ensuring smooth operations and client satisfaction you can often end up facing risky situations. Entrepreneurs take risks all the time. But sometimes, there are consequences.
If you operate a small business, you are already aware of the risks that you have to deal with. It’s your responsibility to minimise those risks and tackle problems effectively. So, how do you do that? That’s where insurance comes in. However, many business owners do not research into the benefits of acquiring insurance. This is because of the common myths associated to them. Here are a few:
- You Can Shut Down Your Business Anytime: In case you get sued by a client or a customer, you can always shut down your business and start a new one, right? Wrong. In court, judges do not care whether or not you business is operational. If you are guilty, you are guilty. That is why, insurance for small businesses is a necessity.
- Your Client Contract Protects: Not only will this get you sued, it’s the fastest way to become bankrupt! Contracts only outline certain agreements. If you breech your contract in a way that will make it void, you will have to pay for the damages in court. Insurance such as professional indemnity protects businesses from such situations and pays for the legal fee.
- You Need Insurance for Every Client: Not only is this not true, you can get one package for everyone. There are some exceptions but generally, your insurance will cover multiple clients. Negotiate and discuss what kind of coverage you can get with your insurer. They will be able to best guide you on this.
- Insurance is Too Expensive: If you choose the right kind of insurer, you will be able to get a pretty good deal. As a business owner, you should be able to negotiate with your insurer and ask about different policies and coverage. Different insurance have different policies but you can buy as many quotes as you please. Some insurers provide free quotes as well. Do not settle for anything that is out of your comfort zone. As stated earlier, negotiation is key to getting a cost-friendly but beneficial insurance policy.
- You’re a Freelancer: A common misconception between freelancers is that they don’t need insurance because they work from home. This is not only true but if you cause damage to a client, i.e., caused them financial loss, you will still get sued. For example: if you provide business cards to your client and the ink fades away, you can be sued for using cheap materials. A professional indemnity insurance will protect you from such situations.