Over 75% of all businesses are under insured. Well over 40%, especially small businesses, and startups, have absolutely no insurance whatsoever. This is a financially dangerous position to be in. Over 40% of businesses encounter at least one insurable incident, and usually more, within a decade. Most businesses don’t think they can afford to be insured and/or don’t want to worry about progressively increasing premiums.
The operation and internal bureaucratic costs associated with running a business can be very expensive. Over 22% of businesses encounter contract disputes between clients and/or employees Well over 13% will have to deal with employee and/or customer injuries that occur on the work site or on work-related properties.
Not obtaining business-centric insurance coverage can end up being much more expensive than trying to go without it. Employer-sponsored group life insurance coverage is a very common option. It can be expensive and require annual policy adjustments and changeovers. This is not the only option. There are numerous coverage options that can save your money on your insurance needs.
Key Man Insurance
Key man insurance is designed to pay out a predetermined benefit amount in the event that an essential, virtually irreplaceable, or gifted employee dies. An employee who is crucial to a business’ success. This can be an employee who possesses a secret recipe crucial to the success of a food business idea. A co founder employee. Or an employee who is solely responsible for creating, inventing, or designing a secret manufacturing process.
Key man insurance benefits can help pay to keep your business running in the aftermath of such an event. Such benefits can buy you time to find a replacement, “key man,” employee and determine future operating strategies. Key man insurance coverage can cost you anywhere from $100 to $2,000 a year for basic coverage, depending on your business’ size and needs.
This might be one of the least known types of insurance but for a small startup or small business it makes real sense. Especially in startup culture when there are so few employees and each one is of critical importance to the company. Imagine losing the CTO of a tech startup in the early stages. This would be a disaster. With Key man insurance you could help the transition easier.
General Liability Insurance
Have you signed a commercial lease to open your business on public property, employ people to work on-site, sell products publicly to customers, or conduct business in similar ways? Then you may be legally required to obtain general liability insurance. Also known as commercial liability insurance, general liability insurance coverage is legally required for a business to rent public space, sign commercial leases, and sign contracts with clients.
General liability insurance can cover you against employee and/or client disputes, lawsuits, potential bankruptcy, and a host of other risks. You can buy general liability insurance coverage for anywhere from $460 to $2,000 a year, depending on your signature business needs.
If you think about that in the grand scheme of things that is relatively cheap. Something that cost less than $100 per month can save your business from financial disaster.
Burial insurance is a stripped-down version of a traditional life insurance policy. It is also known by the name of final expense insurance. But what does final expense insurance cover? It is insurance that is designed to pay for all funeral and burial related costs and not much else. The average funeral costs anywhere from $7,000 to $20,000, depending on location. Also, most applicants are approved over the phone with no need for a medical exam. A business may be able to offer burial insurance as an employee benefit with some creative bureaucratic maneuvering.
The employee will have to confirm consent via application to their employer or boss being named as beneficiary for the purpose of paying their final expenses. The employer may have to prove insurable interest or prove that the death of the employee will result in financial hardship for the company.
Your business may be able to buy burial insurance for tens of dollars a month per employee. At that cost, employee benefit payouts won’t exceed $20,000 to $25,000. With insurance costs rising this specific type of insurance can save the average company thousands of dollars per year. Compared to life insurance offered by most companies the cost is a fraction of the price.
Going without Business Insurance Is an Expensive Proposition
Over 20% of businesses will fail within their first year of operation. Well over 50% of all businesses will go under after a half a decade. Some of the reasons they go out of business are proper planning. Specifically, not having insurance coverage to cover mistakes and disaster a business may face. You have many options to save money on your insurance needs. Going without it will only be more expensive in the long run. What are your tips on saving money on business insurance costs?