3 Scenarios That Will Make You Glad You Bought A Business Insurance Policy

Why are insurance policies so important to purchase? In layman's terms, an insurance policy protects you from a wide variety of financial risks. Financial risks are anything that could have a devastating impact on your ability to pay for anything that goes wrong. The actual thing that creates the devastating impact is known in the industry as a peril. Perils could also cause a devastating impact on your ability to earn money, further placing a serious strain on your financial health.  You could probably think of many things that could wipe you out financially when you think of your residence, your transportation, your high-ticket valuables, your life, and your physical health. This is why you purchase life, health, home, and auto policies. But what if you want to start a business or purchase an existing business? Will any of your current policies provide financial protection when needed for your business?

While there might be some slight overlap where, say, a life policy would protect you or your business partners if someone dies, you'll need to purchase a business insurance policy. Consider the following scenarios where you'll be glad that you had an existing business insurance policy in place. 

A customer wants to sue you for a product defect

It's common to hear (or read) about product defect suits being filed against corporations, but did you know that even if you're operating a small business out of your residential garage, you can be sued for product defects? All the plaintiff has to do is prove that your product either caused them harm or your product didn't live up to its advertised guarantee. Would you be able to handle the cost of damages if this scenario happened to you? Probably not, and this is why a commercial insurance policy would come in very handy in protecting your finances.

Your employee twisted their ankle while walking down your building's stairs 

You might know that your homeowners policy could provide liability coverage for anyone who gets hurt while visiting your house or if they're injured anywhere on your personal property. You'll need a liability policy for your commercial property, even if you're currently operating inside of your residence or out of a separate building on your personal property. Your homeowners policy won't cover these types of risks, and as the business owner, you are responsible for your employee's health while they perform duties in the service of your business operations. 

Your computer caused an electrical fire

This is another example of a peril that won't be covered under your homeowner's policy, even if you're operating out of your home office, and the fire burns down your home. These are only three scenarios that should make you consider whether or not you could handle these expenses out of pocket. If not, then purchasing a comprehensive business insurance policy should be your next financial decision.