Many small business owners understand that they need business insurance but aren’t exactly sure where to begin in the process. However, it is never a good idea to go into purchasing commercial insurance blindly. Instead, choose a policy that takes your unique risk and needs into account. Here are a few reasons why it’s important to purchase coverage tailored to your industry.
Reason #1: Your Legal Obligations
Your legal obligations play a huge role in the level of business insurance you need to carry. Some areas require certain professionals—such as contractors, doctors, and lawyers—to carry insurance to receive a state license. In other areas or industries, this isn’t a requirement. This doesn't mean you don't need coverage anyway, however.
Every state your company operates in will have a different set of regulations. It is advisable to speak with a trusted agent to determine what type and level of insurance you need to carry for your industry.
Reason #2: Different Industries Have Different Risks
Different industries often have very different levels of risk. For example, a contracting company that installs roofing has a higher chance of a serious lawsuit than a web design firm. The amount of risk your company carries relates to the amount of insurance you need to carry. This is another reason why it is a good idea to purchase a policy tailored to your exact niche.
Reason #3: Product Liability vs. Professional Liability
Does your company provide customers with a service or a physical good? When it comes to insurance, this matters. It is an important concept to understand before purchasing a business policy.
Some insurance companies tailor policy packages more to those who offer services and need professional liability insurance in case of an error in their work. Other industries—such as manufacturing, restaurants, and retailers—need product liability insurance for protection against their product causing harm against another person.
The Bottom Line? You Need Coverage
What all this comes down to is a single bottom line: you need business insurance coverage. But blindly purchasing a policy that might not meet the needs of your company puts you in a risky position. Instead, consider coverage specifically tailored to your exact industry.
You’ve worked hard to grow your thriving enterprise. So, having business insurance is important. Please contact your local agent today at 405-224-5404 to schedule a consultation appointment.
Also Read: Business Insurance for Independent Contractors