In most situations, insurance is optional. You don’t legally need to have insurance in many cases to open or operate your business. The larger your company gets, however, the more it stands to lose. So while you won’t have the law breathing down your neck, you may just put yourself at such risk your entire company has to shut down at the first sign of a problem.
The last thing you want when starting a new business is for a disaster to strike and then strike it down for good. Business insurance is your safety net, and it’s essential even if it’s not a legal requirement. Don’t think you can save a few bucks and avoid that, especially once you start expanding and hiring more employees.
When you legally need insurance
While most business types don’t legally need insurance to operate, that is not a catch-all. Some industries and professionals legally need to be insured in order to do their job. Anything health-related, for example, requires insurance. This applies to doctors, nurses, and even for physical therapists and chiropractors.
It isn’t just medical practitioners that need insurance in order to do their jobs. Restaurants, bars, and cafes are another example. In Canada, for example, restaurants need insurance coverage. In fact, many companies do, just not as a blanket requirement. For example, you’ll need worker’s compensation insurance if you have employees, particularly if they work in any sort of dangerous environment (like using knives or working next to a stove in the kitchen).
You may not need insurance when you’re a one-person show operating your business out of your garage, but once you start growing, it will become increasingly essential. Just like how drivers need auto insurance, businesses need business insurance. The type of insurance and what your policy includes will depend entirely on the size, scope, and needs of your business.
All businesses need insurance
All businesses need insurance, even if you aren’t legally required to have it to operate. The fact is, disaster can and does strike. Insurance may not be the perfect solution, but it is certainly a better situation to be in than to take the brunt of all issues yourself. A fire at your store can completely put you out of business if you aren’t insured. You can face bankruptcy if you’re sued.
This is true for all types of businesses, including service-based ones. In fact, insuring your service-based business requires extra consideration since you’re sending yourself or others out into the field more often than not. Even if your service is entirely digital, you’ll still want insurance. The only thing that changes is the type.
Top insurance policies for service-based businesses
- Property insurance
The climate crisis has meant that wildfires, flash floods, and more are increasingly more common, even in areas that previously never had an issue. Add that to everyday causes of property damage, from a broken pipe to faulty wiring, and the need for property insurance only grows. The only time you can get away with not having property insurance is if you run your business out of your home and are covered by your homeowner’s insurance.
- Liability insurance
All types of businesses can and do get sued for a wide range of reasons. That is why your company needs liability insurance. The type of liability insurance you get depends on the type of service you offer. A restaurant offers a service and a product, for example, and will need general liability insurance. A chiropractor or consultant will often need professional liability insurance instead. These are just a few examples. To help you understand what approach works best for your business, it’s important to talk it out with people who know their stuff inside out, like the insurance brokers at KBD Insurance. Not only can you learn about what version of these essential policies your business will need, but you can also rely on them to find you the best policy at the best rates.
- Worker’s compensation insurance
If you hire workers, then you’ll want worker’s compensation insurance. Some industries need to have worker’s compensation insurance as law; others do not. Typically it depends on what dangers are present in the workplace. In a restaurant, for example, employees may accidentally get cut, burned, and more. The same applies to construction, gardening, and other physically demanding roles. Worker’s compensation, however, isn’t as necessary for a remote desk job, though you may still want to consider it for your company.
- Cyber insurance
Every business, if they want to weather the terrifying storm that is a cyber attack, needs cyber insurance. With AI systems now capable of producing human-sounding chatbots, human-sounding voices, and deep fakes that are hard to spot, the necessity of cyber insurance is only going to increase. Cyber crimes are a huge problem and cost businesses around the world trillions every year. They’re also becoming more sophisticated. While you will absolutely want and need to have security measures to the max and train yourself and your staff to prevent attacks in the first place, having insurance is your backup.
- Commercial auto insurance
Commercial auto insurance is slightly different than regular auto insurance. It’s available for businesses that operate a fleet, even if that fleet is just to get their staff and equipment to and from the workplace. Gardeners and other trade businesses that have special business vehicles will want this insurance. It protects your workers, your vehicles, equipment, and so on. It also covers you if your driver was in any way responsible for the accident since they were out there on the road on your behalf.
Bundling insurance
There are so many different policies that will help you safely operate your service-based business. Some will require specialty insurance packages, others a combination of standard policies at a great rate. Finding the right option at the best price is how you can run your business safely and with one less thing to worry about, so make sure you sort this out as soon as possible.