Entrepreneurial Spirit – Alive & Doing Well in Arizona
With the economy recovering to levels we haven’t seen in a few years, more and more people are taking the plunge and starting their own Arizona business. In fact, the rate of new entrepreneurs being created are at the highest level we have seen in the past twenty years. Now, although we wish that all these new ventures become successful, the facts are that about 15% fail in their first year, and by the third year, almost a third of these new ventures are no longer in business.
The biggest reason given for this rate is unpreparedness, in other words, not having the proper business plan going in, and, also in some cases, not anticipating a disaster that harmed the business to the extent that it had to close. It doesn’t matter what kind of business you are, whether you are a consultant, store owner, contractor, web based business, app designer, or one of a thousand different fields there are, not having an adequate business plan going in usually spells a disaster just waiting to happen.
In preparing a business plan, insurance coverage needs to be a priority. In dealing with new business owners, we understand that they are very sensitive to costs, and that in listing their priorities, insurance coverage is not usually near the top of their list. Most new Arizona entrepreneurs understand the need for General Liability Insurance coverage, but when you start to talk with them about additional coverages that could be helpful, most times they tune you out, which may not always be the best road for them to take.
As we all know, new business owners generally wear many hats when they start out, and since they normally can’t afford an internal risk manager, having an experienced and professional AZ insurance agent can be a huge plus in helping their business. New businesses can face risks that are not covered under a normal General Liability policy, including professional liability, D&O, EPLI, fiduciary liability, cyber liability, and environmental liability, to name just a few. For those with consulting businesses, having Scottsdale AZ Professional Liability is a must, since they are now on their own. With large professional liability exposures, which clients sometimes say that this type of loss would never happen to them, but having this type of policy could easily save their business when that claim does occur.
Another area we feel is important, but so many new companies dismiss again, is Employment Practices Liability Insurance, commonly known as EPLI in AZ. Normally, this is a very affordable coverage, but one of the hardest to persuade clients to buy. With the steep increase in employees filing lawsuits against their employers, and along with it, the very high costs of just defending this type of lawsuit, it makes fiscal sense to have this type of policy. Legal costs for just one claim can run well over twenty five thousand dollars.
Another coverage which clients are also hesitant to buy is cyber liability, which in this day and age of sophisticated hackers, is remarkable. If your company is going to do business on the web, keep records, and accept payments, then having an AZ Cyber Liability Policy is an absolute must. Think about all the companies in the past couple of years that have been hacked. Could your company survive that kind of attack? If the answer is no, then this kind of policy should be in your business plan from the start.
As professional insurance agents, we know that no two businesses are alike, and, with that in mind, we can recommend the types of coverage that will protect your business and give you some peace of mind so you can put all your energies into making your company a success.