Starting your own business is likely one of the most difficult things you’ll ever do, but it can also be one of the most satisfying. Turning your business idea into a reality is an achievement worthy of celebration, and growing it will lead to even more proud achievements in the future. Just as you wouldn’t leave your home, car, or health uninsured, you also need to protect your business to ensure it can keep going. If you’re left paying out of pocket for damages or legal disputes, you can easily run out of the necessary capital to stay afloat. This is actually one of the most common reasons small businesses fail with 29% going out of business simply because they lack money.
Having a business fail due to inadequate planning, misspending, or mismanagement is one thing, but to have a successful business wiped out by a lawsuit or other unforeseen event would be devastating. Fortunately, there are several kinds of business insurance that can protect you.
Public Liability Insurance
This is one of the most important types you should have. Public liability insurance protects you in cases of customers, suppliers, or general members of the public suffering injury or property damage due to negligence. You’re responsible for offering people a safe environment on your property, and if your business operations cause preventable harm, you will be open to lawsuits and other penalties.
Liability insurance helps you compensate for the other party, and it can even help cover your legal expenses such as lawyer fees or court costs. While this insurance isn’t required by law, some industries may require you to have it before you can be licensed or work in a public area. Factors that will determine your premiums include your type of business, the size of your business, your location, and your claims history.
Whether you own your building or lease it, you’ll need commercial property insurance. This protects your building, contents within, and your exterior fixtures from damages. Generally speaking, your property will be protected from any human-caused damages such as theft, vandalism, and accidents. You’ll also be covered in cases of fires, explosions, storms, and water damage caused by burst pipes or faulty plumbing. You may not be covered in cases of natural floods and earthquakes unless you purchase additional coverage. Whether you need this will depend on your location.
Product Liability Insurance
You’ll need this insurance if your business manufactures products. Whether you make your own or you make products to be sold by other companies, you need to be protected in case a defective or unsafe product causes injury, illness, or other damages. Even if products are used incorrectly, your business can still be held responsible for any harmful results.
Business Interruption Insurance
This insurance can be good for any business that requires a specific, physical location to operate. It can protect you in the event that you lose income due to a catastrophic event that forces you to shut down operations. It can also cover expenses incurred due to being forced to move to a temporary location. It’s important to note that these plans generally don’t cover income lost due to a pandemic, so they won’t help with losses suffered because of Covid-19.
Objectives and Key Results
While not an insurance policy, the OKR framework can be used to help organize and grow any business. It was first used at Intel and later helped Google grow from a relatively small business into the tech giant known today. Essentially, it’s a goal-setting framework meant to engage employee participation, improve transparency, and better align departments with company goals. OKRs can be broken into two main parts.
Objectives: These are the overall strategic goals of your company. They should be simple, and it’s best to focus on just a few at a time. An example could be to improve sales by 20% by the next quarter.
Key Results: KRs are the metrics you use to measure progress toward your objectives. If at the end of the first month, sales have increased by 5%, you’d know you were making progress but would need to step things up to reach your goal of 20%. KRs help you determine whether your objectives were too ambitious or too easy.
With the best OKR software, you can easily communicate company goals to leaders across the department and explain how each employee can work toward the objectives. Keeping your business protected and organized gives you your best chance at successful long-term growth.