Six Risks Plumbers Take When They Don't Insure Their Business
1. Financial Loss
First and foremost, insurance for plumbers can protect your small business from financial loss after unexpected events. For example, if your business property is impacted by wildfires, flooding, or other natural disasters, business insurance can help you recover your property and equipment without taking out loans or going into debt.
2. Breaking Laws
Not having insurance for your business is a huge violation of compliance laws in most states. In general, small business owners are required to at least have general liability insurance to protect customers, clients, and employees.
Business owners who do not have this basic insurance coverage are liable for all damages related to their business and may also face penalties or fines for not having an insurance policy.
3. Reputation Damage
If issues arise related to your customer or client relationships, your small business may face potential damage to your reputation. For example, this may happen if a client is dissatisfied with the plumbing service and files a complaint against your business or if a customer is somehow hurt when plumbing services are being performed.
Without adequate insurance coverage, you may not have the financial resources to make amends to the client, which can ultimately damage your reputation. Small businesses with poor reputations are more likely to fail, so it's in your best interest to do everything you can to protect your reputation.
4. Business Interruption
Insurance coverage for your business can also save you from business interruption. Business interruption can occur for several reasons, such as a lawsuit, complaint, theft or vandalism, or natural disasters. Protecting your business from business interruption will allow you to continue to pay employees, rent equipment, and keep your business going so you can eventually turn a profit. This is also a way small businesses can avoid bankruptcy.
5. Property or Equipment Loss
Some insurance policies for small businesses will also protect small business owners from property or equipment loss. Specifically, some coverage plans will allow you to replace equipment or other business property after disaster, theft, vandalism, and certain types of damage. The ability to quickly replace property or equipment can help your business get back on its feet more quickly.
6. Employee Harm
Finally, having adequate insurance coverage can also reduce the risk of harm to your employees. For example, workers' compensation insurance coverage will protect employees who are hurt on the job. Basic general liability insurance will also cover medical treatment for employees who are injured while working.
Why Do Some Business Owners Skip Out On Insurance?
Although skipping out on insurance is a bad decision, some small business owners avoid insurance because they believe insurance coverage is too expensive. Some small business owners may also be unsure about the type of coverage they need or may believe that small businesses don't need to have insurance. However, even if your business is just you and one other person, you are still legally required to have an insurance policy.
What Is the Best Insurance for Plumbers?
Most small business owners can benefit from using insurance designed for small businesses, such as a Business Owner's Policy. In general, the three main insurance coverages included in a Business Owner's Policy will include commercial property insurance, general liability insurance, and business income insurance.
Commercial Property Insurance
Commercial property insurance is a type of coverage that insures your business location and business equipment, regardless of whether you rent or own your business property. In some instances, commercial property insurance may also cover vehicles that are used or owned by the business, particularly vehicles that carry business equipment.
General Liability Insurance
General liability insurance is a type of coverage that will protect your small business from claims about property damage or bodily injury. These claims can come from clients or employees who claim to be harmed by your business in some way. General liability insurance is the most basic type of insurance coverage small business owners should have.
Business Income Insurance
Business income insurance is another common coverage that is included in a Business Owner's Policy. This specific coverage will help small businesses recover from lost income after natural disasters or other unexpected circumstances that may interrupt your business operations.
Should You Consider Data Breach Insurance?
Modern businesses may want to consider data breach insurance, particularly if you use service software that manages customer information. There may be certain rules and regulations your small business must follow if you store personal identification information about clients, which can include addresses, names, phone numbers, and payment information.
Data breach insurance is a special policy that can be added to your Business Owner's Policy insurance that will help you cover the costs of responding to any type of data breach or cyber-attack. This insurance policy is usually used to cover the costs of legal teams, public relation firms, and other impacts on customers or employees.
How Much Do Plumbers Pay for Insurance?
Small plumbing businesses generally pay about $1,200 to $1,500 a year for insurance based on the coverage for specific insurance policies. The larger the coverage is for your small business, the more your insurance premiums will be. However, plumbing insurance for small businesses is generally affordable for any budget, and it's better to have insurance to protect your financial interests.
Insurance for plumbers is a smart, affordable business decision that can save small business owners from a lot of grief. The risks of running a business without insurance can include damage to your reputation, harm to your employees, and even fines for breaking insurance compliance laws. To learn more about how you can protect your business and boost productivity, visit ServiceBox today.