Trying to operate a startup without business insurance is quite similar to gambling at a casino. No one knows the result of any gamble until it unfolds, but odds usually point to losing money. A startup can be sued or fined for more than the company’s net worth. Here are key reasons why a startup should buy business insurance in King County, Washington.
Why Should Your Startup Have Business Insurance?
Since it’s difficult for a startup to recover from a big loss due to an unexpected disaster, it’s wise to purchase insurance in King County. Insurance works as a safety net to protect your investment in your business. Without insurance, you’re on your own when it comes to paying for unexpected damage or emergencies.
The Risks of Forgoing Insurance
One of the main risks of avoiding business insurance, besides being unprepared for a financial disaster, not purchasing adequate insurance coverage can limit your B2B opportunities. Many organizations will only do business with other firms that provide proof of insurance. Here are specific risks of paying out of your own pocket if your business lacks insurance.
Any business that operates in a commercial building can suffer property damage from storms, fires, and other natural disasters. If your business burns down, do you have the money to replace it starting from scratch again? An easier solution would be to carry commercial property insurance, which would pay to rebuild your building.
Determined burglars can breach even the best security systems. Without commercial insurance, you’re at the mercy of criminals. Most of your stolen items would be covered with the right insurance plan in place. The same is true of property damaged due to vandalism, and a general liability plan covers broken windows and various other damage caused by vandals.
A business can get sued for many reasons, particularly if a customer or competitor feels they’ve been cheated. Without commercial insurance, your company can get wiped out by one lawsuit. The types of lawsuits that can topple a business quickly if it doesn’t carry insurance include physical injuries such as tripping on the property and mental injuries such as defamation.
Another area of financial risk is related to the failure to comply with complex government regulations. This setback can lead to paying enormous fines and penalties in the thousands of dollars. A standard business insurance policy, though, covers regulatory fines and penalties.
The Potential Consequences of Leaving Your Business Uninsured
If you go the uninsured route, you will leave your business wide open to liability issues, and it can limit the organizations in which your firm engages. If you don’t own commercial property, being uninsured will also limit where you can rent business space.
Perhaps the worst consequence of failing to carry business insurance is that it can potentially result in jail time. Certain businesses must carry certain types of insurance. A company that pays employees, for example, must carry workers’ compensation coverage. Business owners who violate such state requirements face high fines and potential jail time.
It’s better to have peace of mind with business insurance in King County, WA, than to gamble your business will never face a lawsuit or some type of emergency. Getting the right insurance serves as a strong financial defense against costly disasters. Contact us at Humble & Davenport Insurance Brokers for more information on getting the right coverage for your business.