You may face many daily expenses as you run your business—from payroll to meeting inventory needs. But one area you may overlook is buying business insurance. Incorporating or becoming an LLC typically protects your personal property from lawsuits, but that protection is limited. Business insurance can help fill any gaps to make sure your business is protected.
Let's take a closer look at some of the reasons why your business needs insurance.
It covers you in case of legal action
If a disgruntled employee, contractor or customer decides to sue you, carrying the right type of liability insurance may mean the difference between staying open or closing your doors. Even if you win a lawsuit, the cost of defending yourself can be enough to wreak havoc on your bottom line. Business liability insurance gives you the peace of mind you need to focus on your day-to-day operation and potentially improve your bottom line.
It covers you in case of natural disaster
If your business is impacted by a natural disaster, such as a forest fire, carrying property and casualty insurance will cover any loss of property, such as buildings and equipment. And you may want to consider a Business Owner's Policy (BOP), which covers any income or normal operating expenses lost during the time your business is closed for a covered loss. The only exception to this is loss from flooding—you should look into carrying flood insurance for protection from damage or loss due to a flood (whether natural or man-made).
It shows that you're sound and reliable
When you have business insurance, it shows customers, potential customers and creditors that they're considering a safe option. They'll see that if anything goes wrong, you have a plan in place to cover your commitments. That's why many companies advertise the fact that they're "licensed, bonded and insured"—it's stated as a way to build trust.
It protects you and your employees
Business insurance protects your most valuable assets: your employees. For example, if an accident occurs, workers' compensation insurance pays for hospital, rehabilitation and medical expenses—and even provides disability payments. Protecting your employees also protects your business against lawsuits or liability claims—potentially saving your business a lot of money and its reputation. And if something happens to you (as the business owner), company-owned life and disability insurance coverage covers the loss of income you would have earned or the purchase of your interest in the company.
It's required in many contracts
If you rent or lease a facility, your landlord may require you to carry business liability insurance (at a minimum). Additionally, you may also find that some clients require you to carry insurance as part of a contract of service or agreement.
The law requires it
The federal government requires businesses with a certain number of employees to carry workers' compensation, unemployment and disability insurance. If you don't carry the required coverage, you may end up paying fines and penalties. And unfortunately, you may be excluded from bidding for public contracts.
The bottom line
No one can predict what might happen in the future. While no one expects natural disasters, injuries on the job or even the hassle of lawsuits, it's always best to be prepared by being properly insured.
If you have questions about your current insurance coverage, or are interested in a new policy, contact an experienced insurance advisor(opens in a new tab) for more help.
Looking for more business insights?
Ready to explore?
Only deposit products are FDIC insured.
McGriff Insurance Services, Inc. CA License #0C64544.
Investments and insurance products and services are: NOT A DEPOSIT • NOT FDIC-INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY STATE OR FEDERAL GOVERNMENT AGENCY • MAY GO DOWN IN VALUE
The information provided is not intended to be legal, tax, or financial advice. BB&T hopes you find this information useful but we cannot guarantee that it is accurate, up to date, or appropriate for your situation. You should consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.
McGriff Insurance Services, Inc., and McGriff Seibels & Williams, Inc., are subsidiaries of Truist Insurance Holdings, Inc.
Branch Banking and Trust Company, Member FDIC.
New York City residents: Translation or other language access services may be available. When calling our office regarding collection activity, if you speak a language other than English and need verbal translation services, be sure to inform the representative. A description and translation of commonly-used debt collection terms is available in multiple languages at www.nyc.gov/dca.
Branch Banking and Trust Company is now Truist Bank. Learn more.
BB&T and SunTrust have merged to become Truist. Both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees and pricing. Our friendly teammates at your local SunTrust branches will be happy to walk you through their respective products. You can also learn more by contacting them at 800-SUNTRUST or SunTrust.com.