Grand Rapids is growing city with a fun downtown culture that attracts hundreds of entrepreneurs each year. Small businesses really make up the heart of the city and you can find them around every corner. In 2014, Michigan was home to 856,682 small businesses. These same businesses were responsible for providing jobs to 1,755,901 people that year. While courageous entrepreneurs love the potential of Grand Rapids, starting a business doesn’t come without risks. In fact, $12,8848,751 was paid out to small businesses for losses in 2014.
With so much at stake, every Grand Rapids company should invest in business insurance. A commercial insurance policy can be designed specifically for your business needs to protect you from liability related to your property, products, and even employees. Trusted Choice Independent Insurance Agents can walk you through the process of selecting the coverage that is right for your company.
There’s always a risk that your business could wind up with a lawsuit. Liability insurance is created to protect small businesses from this risk. If a person is injured on your property or because of your products, liability insurance will protect your business assets and pay for damages. There are three main types of liability insurance that business owners should consider.
General Liability: If someone falls in your parking lot or is injured on your property, general liability insurance will protect you and cover related medical costs. According to the 2015 Travelers Business Risk Summary, 60% of small business owners ranked medical cost inflation as their highest concern and over 30% said they felt least prepared to handle this concern. If someone gets hurt and your business is liable, would you be ready to cover the cost?
Product Liability: No matter how much emphasis you put on quality control, things can go wrong for any Grand Rapids business. If you sell a defective product and it causes injury or damage to someone’s property, you could be found liable. According to a national study, 71% of product liability awards and 53% of medical malpractice awards by the court amounted to $1 million or more. Most small businesses just can’t swallow that massive pay-out without shutting down the doors for good. That’s why you need commercial insurance to protect you.
Professional Liability: If your business is centered on offering services rather than physical products, you still need liability coverage. Professional liability insurance protects against simple mistakes that could be ruled as negligence in court. For instance, all doctors carry malpractice insurance just in case they make a small mistake or error in judgment that leads to a lawsuit. In the same way, small businesses should have a professional liability policy as an added measure of protection.
For a small business in Grand Rapids, a single interruption can set off a disastrous sequence of events. For instance, if you are diagnosed with cancer and have to be out of work for treatments, this interruption to your regular business routine could result in major losses to your overall profits for the year.
Many businesses elect to purchase Business Interruption Insurance or Gross Profits Insurance just for this purpose. In this case, the policy would pay out funds in the amount of the profits you lost during an interrupting event. In Michigan, the gross state product in 2014 was 2%. That’s 0.2% lower than the GDP (2.2%) for the same year. Michigan business owners can experience major benefits by investing in a comprehensive commercial insurance policy to cover these losses.
In 2014, there were 119 natural disasters that wreaked havoc on small business properties. As companies scrambled to repair damages, only 61% of losses were covered, leaving $9.7 billion in uncovered damage for business owners to shoulder on their own. Insurance companies pay out billions of dollars each year to cover catastrophic property losses to small businesses. In fact, in 2014, $2.177 billion was paid to Texas businesses for catastrophic losses. If your commercial property is damaged due to a natural disaster, having the best business insurance will protect you and offer you the resources necessary to repair any damage.
Every Grand Rapids small business should be armed with the right policies for worker’s compensation, employee health insurance, and employee life insurance. In 2013, Michigan businesses spent $1,134,005 on insurance premiums, the 39th ranking state for highest premiums spent. The annual cost of healthcare for small businesses in Michigan was 5% lower than the national average in 2013, with a single person plan costing $5,321 and a family plan costing $15,242. As healthcare costs increase, business insurance becomes more vital than ever before to cover worker’s compensation claims and to provide affordable healthcare for employees.
Cyber crime is a growing problem for Grand Rapids business owners, but only 22 percent of small businesses currently have a cyber/data breach response plan. In 2014, Michigan small businesses submitted 10,338 complaints for identity theft, ranking 6th highest in the nation. This troubling trend is driving many entrepreneurs to seek out added protection with Grand Rapids commercial insurance.
Whether you are an entrepreneur contemplating a new start-up or you are an experienced business owner in Grand Rapids, you simply cannot afford to skimp on insurance. From liability to worker’s compensation and cyber crime, these issues can take a major toll on your business and ultimately determine whether you will succeed or fail in the coming year. Our Trusted Choice Independent Insurance Agents have the knowledge and experience to help you create a customized insurance plan for your Michigan small business. Contact a Trusted Choice agent today to get a quote and learn more about how business insurance can protect you.