As a self-employed, you are just as a business owner. Running and maintaining a business can be quite challenging. You are often faced with putting your finances at risk. This means that the same concerns which apply to the majority of small business, such as paying quarterly taxes, planning for unforeseen situations, and so on, also applies to you. This is why it is good to have a part of your business financing not coming from you.
Business insurance offers a great avenue to protect the machinery and equipment you use for your business. Both you and your customers will be protected from business risks. In case something goes wrong, the right small business insurance will be able to offer enough protection for your business.
However, it is quite sad that. It was revealed in a recent study carried out by the Small Business Administration (SBA) that lawsuits are one of the major business risks.
Lawsuits often cost small businesses anywhere between $3,000 and $150,000. With the right business insurance, your lawsuits will not be shouldered alone. Here, we will be taking a look at some of the reasons why self-employed individuals also need business insurance policies.
1. Tax Deductible
Business insurance remains a necessary cost required to successfully run a business. You will be allowed to deduct costs of premiums when your federal taxes are calculated. According to the IRS, the expenses of a business is tax deductible so far it is a common expense in your work, and it is considered helpful and suitable for your business. Due to this, you will be able to save more, pay yourself, or invest more.
2. Protects against Personal Assets
The business structure of sole proprietorship can be convenient since it is possible to file personal and business taxes together. However, a type of structure like this offers less protecting since your personal and business finances are not separated. This is why you need business insurance.
Business insurance will help create a shield between your business and personal assets. In case you are sued by any of your clients, your personal assets such as vehicles, home, bank account, etc. will not be tampered with. Your insurance company will be responsible for taking care of all legal expenses.
3. Covers Business Assets or Activities
The majority of Home-based business owners are of the opinion that their home insurance can cover their business activities. Homeowner’s insurance policy only offer limited coverage for the equipment and machinery used in running your business. Business liability and property insurance offer the best protection for all your business activities and assets. In fact, it offers coverage for lost income.
4. Generally Accepted
Your line of work requires you to go about with insurance. Often times, different insurance policies are often requested for by different industries. In case you are offering many services, will you rather keep obtaining insurance policies or opt for one which is generally accepted? This is what business insurance offers you. With business insurance, regardless of the industry or sector your business operate or serves, you are well protected.
5. Small Business Loan Application
Lenders often ask for proof of insurance before granting small business loans. They may request for any of the following insurance policies.
• Commercial property insurance.
• General liability insurance.
• Workers’ compensation insurance.
However, as a self-employed, all these may not be requested once you possess a business insurance. Your business insurance ensures that irrespective of what happens, you are well protected. This alone can be reassuring to the lender.
6. As Workers’ Compensation
Most states often require businesses to possess workers’ compensation after hiring an employee. This will help cover expenses in case of injuries or illness. Business insurance offers the best form of workers’ compensation that can protect you and your employee in the event of accidents or injuries, especially if you operate in a high-risk industry, for example, home renovation, construction, landscaping, roof repair, and lots more.
There you have it! All the above are some of the reasons you need business insurance, even if you are self-employed. Business insurance will help shield your personal assets, reduce your tax bill, protect your business assets, and help you secure funding. It will also help protect your income In the case of work-related injuries, and ensure that you act in accordance with contracts, rules, and regulations.
Business insurance does more than just risk management, it helps in growing your business. In case you are still contemplating whether you should acquire one or not, you have no reason to wait any longer. Protect your business today by going for the right business insurance policy. This may turn out to be your best decision in years to come.
*Based on original content from Wagepoint