An overwhelming majority of the businesses in the United States, a whopping 99.7%, have fewer than 500 workers, according to the Small Business & Entrepreneurship Council. This statistic is based on information gathered from the U.S. Census Bureau as of 2011. Businesses with fewer than 20 workers account for 89.8 % of U.S. businesses.
Small businesses face many challenges and often cannot bounce back from the same setbacks as larger organizations. Having the proper business insurance coverages in place can mean the difference between staying in business or calling it quits if an unfortunate event should occur.
Theft and Burglary
Many employers are concerned about theft, and rightfully so. According to The Hartford, burglary and theft is the most common insurance claim of small employers. However, theft of inventory does not have as high an impact as some other losses faced by small businesses, primarily because the employer generally maintains the ability to operate.
Slip and Fall Claims
A slip and fall claim, or any claim arising from an injury to a customer, can happen anywhere. Your best defense is always prevention, so it’s imperative that business owners make sure that pathways are free of clutter and debris, walking surfaces are even and in good repair, and that any spills are cleaned up immediately. Outdoors, snow and ice removal should be a top priority.
Just as a customer can get injured, so can an employee. In fact, the U.S. Department of Labor Bureau of Labor Statistics indicates that in 2013, more than 3 million nonfatal workplace injuries and illnesses were reported by private industry employers. Workers’ compensation coverage is required in all states with a few exceptions. In most cases, if you don’t have workers’ compensation coverage, you’re breaking the law. It’s critical that you accurately report payroll and appropriately classify workers in order to comply with the law.
Employees are a valuable asset to a business. The loss in productivity when an injured worker is absent can overwhelm a small business. Return-to-work strategies should be an important part of an employer’s overall strategy in that they can reduce workers’ compensation costs, improve productivity and increase employee morale.
Although less likely to be incurred by most small businesses, fire damage can often be the most devastating. When a fire breaks out, the loss of business personal property and inventory will affect the company’s ability to conduct its business. The resultant loss of revenue, whether reduced or completely stopped, could mean the end of a small business if not prepared.
In the case of fire or another sudden and unexpected event that forces a business to temporarily cease operations, Business Interruption Insurance can be a lifesaver. This type of coverage will typically compensate for lost revenue during the shut-down and is often essential to maintaining cash flow while the business premise is repaired.
While many situations can be prevented with care and diligence, removing all chance of a claim is impossible. An accident can happen and business owners can get tied up in lawsuits that can impact their business operations and their good name.
It’s imperative that business owners have the proper insurance coverage to protect themselves in the event of a costly legal battle or another disruption to their business. We know you have a business to run, but taking the time to meet with your trusted insurance advisor to review coverages is something you can’t afford to skip.