Insurance and your business
Insurance
If you are a small entrepreneur or a small company - you must seriously consider insurance when conducting business.
Recently, I purchased just $1M liability insurance for my current venture. For less then $500.
But, there have been to many times in my life where I have come across a company that didn't "know" any better or just didn't want to spend the money.
In todays America, the lawyers (sadly) rule the majority of how a business "does" business. And one of the first things any business owner knows and addresses is, protect yourself!!!
Recently I worked for a semi-conductor company that never had insurance. Why? Because the chips inside a product were never in direct contact with a consumer, thus, were never and would never be a risk to a consumer (like death, dismemberment, etc.).
When we started to put out the companies first consumer product, the CFO and CEO fought me (us) tooth and nail as to "stupid" reason that we needed to spend money on an item that would not start a fire, or cause a company to lose a billion dollars, or whatever.
By the way, the product was the USB Flash Drive.
So, I had put together all the packaging, pricing, etc. (and warranty - see the post on that one to see how that turned out), presented it to the CEO, CFO, and board, and then brought up that I wanted $20M in bond insurance.
They said why? We hadn't even started to ship the product yet.
I said, because when we ship that first product (which happened the next week), we needed to be protected from all the frivolous lawsuits that were bound to occur.
Again, they asked why?
I said, specifically to the CFO, who had two young children - "Imagine you are an American who sues over anything - like coffee being too hot; and your child swallows the USB Flash Drive, chokes, and dies. What would you do?"
Within two days, I had insurance for $100M to cover out products.
Don't be shortsighted - yes, it does cost some money, but, protect yourself - don't be argumentative with yourself, your accountant, or business partner - do this.
As the saying is - when you don't do something, will be when you need it.