What’s the Best Way to Invest In Your Business commercial insurance?
commercial insurance, If your business has made a profit in recent years, you may be thinking of ways to reinvest that capital back into your company. Thankfully, there are many ways you can do this; you can pour the profit into research and development to come up with new products and services, you can use the profit to renovate your retail or office space to allow for more product and client traffic, and/or you can invest in new equipment and new employees, both of which can increase your output and your revenues. Or maybe you think that the best investment you can make in your business is to use your profits to pay off business debts that can cost your company thousands in interest fees.
Really, the sky’s the limit when imagining the ways you can invest your earnings in order to make your business even more profitable in future years. But if you invest your profits in growing and expanding your business or paying off debt when you aren’t covered by enough commercial insurance, you are making a huge and potentially costly mistake.
Who Needs Commercial Insurance Coverage?
There is no business that can’t benefit from the protection offered by various types of commercial insurance. Certainly, all businesses don’t need the same type of commercial business coverage. For example, a farmer might need crop insurance and equipment maintenance insurance whereas an online marketer might need cyber liability and professional liability coverage.
The point is not that every business needs every type of commercial insurance policy out there; the point is that every business has a need for some sort of insurance coverage to protect its assets and future.
Why Investing In Insurance Is More Important Than Expanding
You might think it’s a better idea to invest in measures that promise to expand your business than it is to invest your profits in insurance, but nothing could be further from the truth. Let’s say that you invest your profits in new equipment and one of your employees is injured while using that equipment-but you neglected to purchase workers’ compensation insurance. Now, not only will your business savings be tied up in making good on your workers’ compensation responsibilities, which include pay, medical expenses and more, but future profits will also be tied to that purpose. And if your business is shut down due to fire, theft or vandalism? Once again, without the proper commercial insurance coverage, you’re not only out your savings but you’re also out of business.
Why Buy Insurance Rather Than Pay Off Business Debt?
Business debt and the interest that it costs your company is often a reasonable investment in your business’s operation. The debt is usually created when you purchase a piece of equipment or invest in other assets that help stimulate profit for your business, which means that said debt is also paying its own interest.
When your debt is an investment that generates a profit, thereby paying its own interest, it becomes much less imperative to pay it off. More important is to protect the investment of debt against losses from fire, cyber theft, liability claims and so on, which is what insurance does.
What Kind of Policies Do I Need?
Commercial insurance policies have been designed and tailored toward specific industries and their inherent risks. It is impossible to prescribe a standard set of policies that all businesses need because every business and every industry is so very individualized.
In general, a business needs to consider insurance that will protect it from liabilities, will preserve the value of any assets it owns (including equipment and merchandise), that protects employees from financial damages caused by workplace injuries, and that creates a replacement for lost profits when the business is forced to temporarily shut down after an insurable incident.
In order to determine the specific types of policies that can help your business, give us a call. We can help you understand all of the individual risks created by your line of business and design an insurance portfolio for your company that ensures your future profits can go toward business expansion rather than liability and loss.