Factual Scenarios: Why You Need Business Insurance

Thu Apr 2, 2009 10:47am EDT

Good luck and positive thinking will probably not protect your business from losses. Unfortunately, bad things happen to the most conscientious business owners. That is why you need insurance. Like the following examples, if you can reasonably imagine it happening to you, it might.

* You pull a healthy tooth from your patient's mouth, and she sues you for malpractice.

* Your secretary needs surgery and months of physical therapy to correct her carpal tunnel syndrome.

* You arrive at work one morning to find that all of your computer equipment has been stolen.

* One of your salespersons does an interview with a newspaper and calls a competitor an "idiot" and jokes that he has been known to date underage girls. The competitor promptly sues you for defamation.

* A customer slips on a just-washed floor in your market and breaks her ankle.

* One of your warehouse employees has been taking electronic equipment and selling it from his house.

* A number of children have severe allergic reactions after eating cookies you manufacture--you forgot to list whey in the ingredients.

* While driving a client from the airport to a meeting, one of your employees hits a guardrail and injures herself and the client.

* The building where your business is located is damaged in a fire; the damage to the building and your equipment keeps you from operating for three months. Between lost profits and continuing business expenses you lose $150,000.

* One of your senior executives has a heart attack after you tell him that he is being transferred to a small town and getting a pay reduction.

* Individuals who have donated large sums to your nonprofit organization sue the board of directors for mishandling donations.

* One of your employees leaves on a coffee maker and it burns down the building where you lease office space.

* Your employees have been complaining about feeling unsafe because your parking lot lights have been burned out. Partly because it's a low priority expense and partly because you just keep forgetting to take care of it, the lights have been out for a number of months. One night, an employee is robbed and severely beaten on the way to her car.

* Shortly after the resignation of your accountant, you discover that she has been writing company checks to herself and family members for the past fifteen years.

* A UPS delivery person slips on your icy driveway while delivering office supplies to you for your home office.

* An entire shipment of evening dresses you have designed and manufactured is destroyed by a warehouse flood.

* After months of negotiations, you finally sign a contract for the shipment of $10,000 of parts. Shortly thereafter, your building burns down and you have to cease operations for a number of months. You then contact your distributor, who has already invested a significant amount of time and money into fulfilling your order, to tell him that you cannot fulfill your obligation. He then sues you for breach of contract.

* You fire an employee who was constantly late for work and alienated customers. He turns around and sues you for wrongful termination.

* Your nonprofit organization throws a wine tasting fundraiser using employees and volunteers as bartenders. The wine is free and the guests are encouraged to drink as much as they like, even though they become clearly inebriated. On the way home from the event, one of the guests gets into a car accident and injures a family of four.