Every year, thousands of people launch their businesses. As per the Small Business Administration, approximately 400,000 startup companies have emerged in the last decade. However, many companies fail yearly, demonstrating how challenging it is for SMEs to thrive and expand.
Therefore, getting business insurance or a general liability insurance policy is important to avoid any financial issues. Here are all the justifications about why purchasing general liability insurance might help small business owners lighten some of their financial responsibilities.
Take a look at this guide to understand why business owners need general liability insurance.
1. Sudden Disability
Life is unpredictable, and we all should be prepared to face any challenges. According to the Social Security Administration, one in every four people become disabled during employment. Considering these probabilities, business owners should buy high-quality disability insurance to receive a percentage of their salaries if they can’t work any longer.
2. Death Benefit Fund
Most people form partnerships when launching a company. In this situation, partners depend on one another, and each stakeholder contributes unique skills and knowledge to the company. But if one partner gets sick or passes away, it might have a detrimental effect on the company. As a result, an insurance policy will offer a death benefit capital that the surviving stakeholders can use to buy the departed person’s shares.
3. Property Damage
Workers often unintentionally damage clients’ packages while delivering them. Your general liability coverage could help in paying for the damages. This insurance helps to gain the trust of your client.
4. It Protects You From Bankruptcy
Most business owners use their personal holdings as collateral when applying for business loans. Some people even have significant debts to banks or lending institutions. Profit margin can skyrocket if the company keeps expanding.
Moreover, things can go downhill if the company isn’t making enough revenue. Events like their death or disability can affect their family. Therefore, an entrepreneur should consider getting GL insurance to reduce the likelihood of going bankrupt.
Now that you understand the importance of general liability insurance, it’s time to get one for your company. Never trust an amateur to handle your insurance plan. The best strategy is to do your homework, meet 4-5 insurers, check their credentials and then decide which one is ideal for your company.
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