Why a lack of business insurance can land you in big trouble

As a business owner, you’re no doubt always looking for ways to bring your costs down. However, there are certain expenses that you simply can’t avoid, and taking out the correct insurance policies is one of these. If you’re lacking the necessary financial cover, you could land your company in big trouble – and here’s why.

Breaking the law

Certain forms of insurance are a legal requirement and if you don’t have these policies in place, you risk incurring potentially sizable fines. For example, if your firm has staff members, you are obliged to take out employers’ liability insurance. On its website, specialist broker Chill Insurance states that these policies provide cover if your organisation becomes legally liable to your personnel if they suffer injury, illness or death as a result of the work they do for you. You can be fined thousands of pounds for every day you lack this type of cover.

In addition, if your company uses motor vehicles, you must have suitable vehicle insurance in place. As a minimum requirement, you have to have third party motor insurance.

Damaging your reputation

As well as potentially costing you considerable sums of money in fines, lacking insurance that you’re legally required to have can do serious damage to your business’ reputation. People want to know that the firms they deal with have a responsible approach when it comes to legal and financial matters. So, if you flout the law by forgoing the necessary cover policies, you risk putting prospective customers off.

Risking your firm’s finances

Of course, not all forms of insurance are required by law, but even those that aren’t can play a big role in protecting your company’s finances. Examples can include public liability, product liability, professional indemnity, business interruption, buildings and contents cover. It can be impossible to predict when problems will arise for your company and it’s only by having suitable insurance in place that you can mitigate against the relevant risks. Whether a customer takes you to court, your premises are flooded or your products are stolen, having to bear the costs yourself could spell financial disaster.

As these points illustrate, it is crucial that your firm takes the issue of insurance seriously and that you make sure you get the right policies for your organisation. If you’re not sure which types of cover you need, do some research online or seek expert advice. Failing to address this issue could jeopardise the long term success of your business.