Starting a new business comes with many risks and uncertainties. As an entrepreneur, you’re responsible for setting up the legal and operational framework for your company, while also facing potential competition from established businesses in your niche. In the midst of all these responsibilities, buying insurance might seem like an unnecessary expense.
However, skipping out on business insurance is a bad decision that could have catastrophic consequences. Here are just a few reasons why you shouldn’t consider starting a new business without insurance:
1. Protect your company’s assets.
Running a business involves accumulating assets that you’ll need to keep your operations running smoothly. These assets could include digital tools like your website or social media pages, or tangible items like inventory, equipment, and property that you own or lease.
Without insurance, you could be left financially exposed if any of these assets are damaged or destroyed due to a natural disaster, theft, or other unexpected event. Insurance can help cover the costs of repairing or replacing these assets, so you can continue operating your business with minimal disruptions.
2. Cover your liability risks.
As a business owner, you’re liable for any injuries, property damage, or other accidents that occur on your property or as a result of your business operations. Without insurance, you could be personally responsible for these costs, which can quickly add up to tens or even hundreds of thousands of dollars.
Insurance can help cover your liability risks so you’re not forced to dig into your personal savings or assets to pay for unexpected costs.
3. Build trust with customers and partners.
Investors, lenders, and customers all want to see that your business is built to last over the long term. Purchasing insurance coverage shows that you’re serious about protecting your business interests and ensuring that you can continue to operate in the face of unexpected challenges.
Wise entrepreneurs know that purchasing insurance coverage isn’t just a low-priority checkbox to tick off before launching a business. It’s an essential step to protect entrepreneurs, their teams, customers, and investment into the future. So, if you’re thinking of starting a new business, make sure that insurance is at the top of your to-do list.