In a Federal Emergency Management Agency study, 40% of businesses don’t reopen after disaster strikes, with a further 25% shutting within a year. Companies may also suffer other disruptions like legal liabilities, changes in the business environment, or vandalism.
That said, businesses require a contingency plan as protection from unforeseen risks. A perfect example is the importance of business insurance which covers entrepreneurs and professionals from everyday risks like legal costs, financial loss, damaged stocks, and business interruptions in Northridge, CA.
Businesses run on the foundation of supporting infrastructure, equipment, and machinery. The operations can halt if a fully stocked warehouse goes up in flames.
Luckily, business insurance covers ensuing effects like lost income, property damage, and destroyed stock.
Below is a list of property items covered by business insurance cover:
Lastly, the coverage protects your business in case of property damage to a third party during operations.
When a business faces unexpected risks, normal operations are disrupted, leading to financial risk.
For instance, a storm can cause a retailer to shut down. Consequently, it can fail to fulfill orders, suffer reduced sales, and encounter unbudgeted repair expenses.
Business insurance provides compensation to prevent out-of-pocket repairs, lost income, and an impending financial crunch.
Ultimately, it is a shock absorber from potential financial loss and income disruptions.
Insurance is an excellent business continuity strategy. A company can quickly lose track after encountering unforeseen risks like fire or floods.
Remember, recurrent expenditures like wages, rent, taxes, and loans accrue monthly.
If the business closes for an extended period, it’s likely to lose customers, suppliers, and staff to the competitors.
Moreover, cash reserves may not be sufficient to cover unforeseen losses like legal costs.
That said, business insurance is a welcome relief that offers cash injection to cover emergencies and facilitate a quick turnaround.
Legal liability is one of the challenges that face business owners. Unfortunately, a legal suit requires hefty amounts to cover investigation, professional fees, court fines, and settlements.
The right business insurance policy can offer reimbursement to minimize financial loss and friction during the process.
Here are a few examples of how business insurance is crucial
No business owner deserves to close or scale down after encountering unforeseen risks. Instead, you can shield yourself from unforeseen risks using business insurance.
At Panorama insurance agency Northridge, CA, we’ve been protecting businesses since 1973. Contact us or call us at 818-781-6630 to get your quote.