Insurance Is Not Enough, Here Is What You Need for Your Business to Be Fully Covered

(Credit: Pexels) Insurance Is Not Enough, Here Is What You Need for Your Business to Be Fully Covered
December 10
1:28 AM 2021

By all means, start with insurance. If you open a business without insurance, you are committing fiduciary malpractice. You will eventually be sued by a client who you didn't adequately protect. And you will be sued by your stakeholders for leaving the business in such a vulnerable position. Then, there are the natural disasters. They won't bother suing you. They will just huff and puff and blow your house of cards down. And to be clear, you will deserve every bit of the ruin you brought upon yourself by not having insurance.

In many places, you can't start a business without a minimum level of insurance. That means that in a physical location, a slip and fall incident won't wipe you out. If the roof caves in and injures someone, they, and you are covered. You are going to want to go well beyond basic liability. You need to be covered for theft, natural and unnatural disasters, and the kinds of things that are only covered by special riders. While there is such a thing as too much insurance. It is always better to be over-insured than under-insured. Once you have that squared away, you can work on these other protections that are absolutely vital to the stability and longevity of your business:

Emergency Funds

In business, things go from prosperous to pear shaped in a hurry. That means you have to be ready for the worst at all times. The worst comes in many forms. Most of those forms end up being very expensive. To ensure against that kind of crisis, what you need is a quick and sure source of emergency funds. More often than not, those funds will come in the form of a short-term loan. 

Do your research and choose the loan company that best suits your needs. For many, it is a matter of which company will work with them even if their credit history has a few challenges. Rough credit is not the end of the world. You might have trouble getting a traditional bank to look at you twice. But these days, banks don't have the last word with regard to whether your business will live or die after an unexpected emergency. You have it within your power to take control of your future emergencies by sourcing the emergency cash provider that works best for you.

Data Security

Once you determine what insurance you need for your small business, you will need to add data security for maximum protection. The fact is your biggest threat is probably not a tsunami slamming into the nearest coast. It is a ransomware exploit that will force you to pay a lot of money to regain access to the data on your computer. 

It is easy to make the mistake of believing the IT personnel in all those other companies are idiots who were too careless to do basic due diligence. That is exactly the arrogant assumption that allows attackers to continue their successful attacks. Everyone thinks it couldn't possibly happen to them, until it does. Going without adequate protections in place is the same kind of malpractice as not having insurance. Even if you do nothing else, have a complete, air-gapped backup of everything on every hard drive that matters to you. Never connect that system to the internet. Do your backups manually on a portable drive and carry it physically to your backup system. Just doing this should allow you to survive even the most sophisticated ransomware attack.

A Remote Work Strategy

A lot of businesses were caught flatfooted when the pandemic hit because they didn't have a contingency plan for remote work. They didn't have the corporate mindset for it, the management structure, or the hardware/software infrastructure. If another disaster strikes, do you have a plan to continue conducting business in a different way? If not, you are not protected. Insurance will not cover that kind of situation. You need to be the kind of business owner who has a second, or even a third way to do business just in case the one you are relying on now is suddenly no longer available to you. 

Insurance is extremely important. Get the maximum amount you can afford. Just know that you are not done. Source some emergency funding, data security, and a contingency plan for doing business when life goes pear-shaped.

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