There are few words that can distract your mind from what it’s doing and send it careening into a pit of anxiety quite like, “What if?”
While those two little words can be the onramp to the imaginable, they also can be the gateway to the unexpected. That’s where business insurance comes in. As an insurance provider, we think there’s no better way to recognize the reality of entrepreneur risks and appreciate the benefits of having business insurance than by looking at some examples of “what if?”
To illustrate our point, take a look at the scenarios below that could happen:
Ankita has run her accounting firm for several years. Debits continue to equal credits, and her bottom line continues to grow steadily into the six-figure range. Just as rewarding for Ankita is the opportunity to help clients, many of whom are small business owners like herself.
One day she gets a call from a long-time client. They just received a letter from the IRS, which has determined they owe substantial taxes and is charging them with penalties. The client claims Ankita and her firm were negligent and reported their income incorrectly. As a result, the client is suing Ankita for the cost of the penalties.
When Ankita started her business, she purchased professional liability insurance. It’s designed to provide coverage if a client claims that you were negligent in providing professional services . In Ankita’s case, her professional liability policy could help cover her legal fees and the IRS penalties if she's found at fault (up to the policy's limit).
Pieter is a professional photographer. Weddings, portraits, even some photojournalism on the side. He has a good eye and a great rapport with clients, so he’s been able to develop a healthy business.
He arrives at his studio one morning and discovers it was burglarized the night before. He immediately sees that his photo backdrop decor is destroyed. The scene gets worse. His camera and some other gear, which was tucked away under the front counter, are missing — stolen.
Without his camera and backdrop, Pieter has to cancel several portrait appointments. On top of that, he has to replace the stolen camera and gear and pay for repairs to the damaged backdrop.
Fortunately, Pieter’s vision extended beyond taking photographs, and he purchased a business personal property policy as part of his business insurance. It can cover the costs of the stolen and damaged property (up to the policy’s limits), helping him to get back to business.
Say hello to Brandon, the owner of Brandon’s Burritos. He has a lot of loyal customers who have helped his business thrive. He also has a lot of competitors. Brandon mentions one of his competitors in an online post. The post says that Tammy's Taco Truck probably serves expired food to cut down on costs.
The news spreads fast, and Tammy’s Taco Truck begins to lose business — even during her popular Taco Tuesday promo. Tammy suspects that Brandon’s social post resulted in customers bypassing her Taco Truck.
Tammy knows her food is fresh and sues Brandon for the comments he made about her food. For Brandon, that could mean paying a libel claim, along with the legal fees to defend himself in court.
A business owner’s policy, or BOP, usually includes general liability, commercial property insurance, and some other coverages all rolled up into one … a lot like one of Brandon’s burritos. With his general liability insurance, Brandon’s legal costs could be covered up to his policy's limit.
Kendall is a business consultant. He's bright and successful with an MBA and several Fortune 500 positions on his resume. It’s another busy day at the office when he responds to what appears to be an email from his credit card company. Cross that off the to-do list.
Unfortunately, the email was actually sent by a team of hackers, and the information he provided allows them to install ransomware that locks his computer systems. The cybercriminals demand an extortion payment to unlock them.
He’s not the only one having a bad day in cyberspace. One of Kendall’s fellow consultants in the same office building receives a number of emails and calls from her customers saying they’re having trouble accessing their accounts. She soon realizes she has been hacked and important customer information may have been stolen.
It’s a good idea to know how to prevent ransomware. But while Kendall may not have made the best decision replying to that email, he did choose to get a cyber liability policy as part of his business insurance coverage. According to a recent study, the average ransomware payment is more than $800,000. Cyber insurance can help cover those costs, up to the limits of your policy.
It also can cover other costs associated with a successful cyberattack, including:
We’re all about helping small business owners like Ankita, Pieter, Brandon, and Kendall find the insurance they need. And we work with leading national insurers who specialize in coverages for small businesses. Our free online tool is there to help whenever you’re ready. 24/7. And our team of licensed agents are just a phone call away to answer questions about how to insure a camera, cyber liability insurance cost, and some of the other risks of being an entrepreneur. Online or on the phone, we’ll help get you the financial protection you need for your business.
“What if?” doesn’t always have to be the start of something unpleasant or unwelcome. For example:
“What if I could work for myself and take more control of my life?”
“What if I found an opportunity to use my talents and skills to make money for me and not someone else?”
“What if I finally took that leap and started out on my own?”
There are many times when it can be a good question to ask. We know starting and running a business comes with a lot of questions. When it comes to protecting that business, we come with a lot of answers.
You can find many of them in our online Resource Center. We invite you to check it out the next time you come upon a “what if?” situation.
As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing helpful articles for small business owners.
Ed writes on a number of topics such as liability insurance, small business funding, and employee management.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.