Business Insurance: Covering for Worst Case Scenarios

One of the questions new business owners have to ask is “How much is business insurance?” They’ve quit their high-paying jobs in the corporate world, said goodbye to the rat race, and finally followed their hearts and opened a business of their own. It’s what they’ve always dreamed of doing, and the possibilities of it all excite them to no end. But putting up a business is not as easy as it looks. First, they have to think of an innovative concept that’s never been done before. If it has been done before, they have to think of where to put the new business and who its target market is. Second, they have to squeeze themselves into an already highly competitive space, and they have to think of ways to beat their nearest competitors. Building a business from scratch comes with a price of course. They have to invest in capital to actually keep it going. They have to deal with customers and their demands. More than that, they have to deal with a lot of risk. Putting up a business is a gamble, and there’s plenty of risk involved. This is where business insurance comes in.

Business insurance has many faces, because the risks involved in running a business are plenty. What do business owners have to insure, exactly? First, there’s Property and Casualty. A business owner has to insure the property where the business is located, as well as its contents. For instance, the unit where a new cupcake shop is opened should be insured, in case someone leaves the oven on and causes a fire, not only damaging the shop and everything in it, but accidentally killing someone as well. Then there’s Liability. Looking at the same cupcake shop, if something goes wrong with the cupcake mix and a customer gets sick from eating the cupcakes, that customer can sue the shop for personal injury. Liability insurance protects the business from such cases. There’s also Commercial Auto Insurance. When the cupcake shop’s delivery van gets involved in an accident, someone has to pay, right? Businesses rarely run without employees, and when employees are hired, they come with all sorts of demands. Health insurance is something most employers provide for their employees. A cupcake shop owner wouldn’t want to have the head chef sick and unavailable for three weeks, unable to pay his hospital bills. There are more ways to get a business insured from all kinds of risk, but these are the most common.

Looking at all the types of business insurance, one can definitely see that putting up a business is not as easy as it looks. Putting up a business, even one that was properly and thoroughly planned, remains a challenge. But some people are called to do it, and some people are brave enough to follow their passions. There’s risk involved, yes. It’s always a gamble, but with higher risk comes the possibility of higher returns. And risk can be minimized. That’s exactly why business insurance exists.