When it comes to running a company or heading up a start up there are a lot of factors to consider. The world of business leadership is a deeply satisfying and challenging one and it isn’t something for everyone or those who are not up for the challenge. For the person who is attracted to this kind of lifestyle, its deep challenges, long hours, and a multitude of learning curves are what make it so appealing.
When it comes to running a business, one of the most important and fundamental factors to consider and take seriously is business insurance. This is something that many professionals will actually refuse to operate without, despite the scale or size of the company or business they are running. The good thing about business insurance is that it’s not something that has ambiguous good qualities. In fact, when it comes to navigating the modern world and the current climate of how quickly clients and customers are to take businesses to court, it can be very clear to see why it would be necessary.
If you have been wondering what exactly business insurance is and if it’s something you need, here are a couple of things to consider.
Business insurance is a protection against liability for professionals and businesses that can span a wide variety of practices and situations. This kind of insurance is not meant to protect against purposeful negligence or harmful workplace toxicity but instead is supposed to protect businesses that might unintentionally be accused of this.
The simple truth is that in a lot of businesses the question is rarely ‘if’ a lawsuit will arise and more accurately ‘when’ a lawsuit arises. Unfortunately, there are always going to be things that can go wrong when it comes to running a company, and sometimes those errors can result in lawsuits.
While there is nothing wrong with hoping that you or your company never come under a lawsuit, history would show that this can happen to anyone. In fact, having policies in place to help mitigate the possibility of a lawsuit is a great practice, but it does not negate the need for insurance. Most insurance companies actually won’t consider insuring your company if they don’t see due diligence on the part of the company to have contingency policies and strong HR in place to help prevent lawsuits from arising.
Here are some factors to consider if you are on the fence about whether your company needs business insurance.
Your company may have a top-rated employee satisfaction rate and may work hard to create a great atmosphere, but the truth is you can’t control everyone. There is always the chance that you employ just one individual who may commit a gross violation of someone’s rights or commit some kind of offense. What’s more, is that these situations can happen to outside clients, or to other employees within the company.
In a case like this, a wrong that’s committed can oftentimes result in a lawsuit, whether from an employee or a client. Having a strong HR department and clearly defined steps of contingency will go a long way to helping you secure insurance, that can help protect you from a lawsuit.
Another factor to consider is the kind of company you run. While a lawsuit from an employee or a client can happen for any number of reasons, some companies are more vulnerable and susceptible to lawsuits than others. Tech companies for instance are generally advised to never operate with tech EO insurance which protects against any kind of errors or omission that may result in damages to their client.
Another important factor is the leadership that runs your company. This isn’t just for the corporate world but even applies to the nonprofit sector. When it comes to protecting your executives, this is crucial in order to maintain good leadership. Without management liability, your company can be not only susceptible to employment practice liabilities, but also to your executives being individually targeted.
This can create a dire situation for companies that not only suffer financial loss but also experience their executives being individually sued. In fact, many professionals will refuse to serve as executives, whether in the for-profit or nonprofit sector, without D&O insurance that protects them from being individually sued over an offense of the company.
Insurance for businesses helps to ensure that in the unfortunate case of a lawsuit, the entire company won’t suffer in a way that may put that company in jeopardy. While it’s possible to operate without insurance, it’s never advised. In today’s world, there are several examples of how a lawsuit, from within or without a company, can arise for any number of reasons. Business insurance is a tool that helps protect companies so that a lawsuit can be an opportunity to grow through the experience, and not be shut down because of it.