Some folks feel business insurance is mandatory. Here’s an example. When I worked for the condo association in downtown Chicago mentioned earlier, the board of directors felt their errors and omissions insurance policy was highly important. At one board meeting, I asked the board to buy a new copy machine and fielded questions for more than 20 minutes before the board voted 5-4 to purchase the new machine. The next item on the agenda was an increase in the board’s errors and omissions policy from $1 million to $2 million. My boss presented this for 10 seconds and then they voted unanimously YES!
Here’s another example. Businesses that were impacted in the September 11 terrorist attacks, Hurricane Katrina, and the San Diego fires all incurred losses. Some of the businesses recovered. They had purchased business interruption insurance to help them get through an unknown disaster. Businesses that did not have current business interruption insurance had a tougher time recovering after these events. Some didn’t recover at all.
Here’s a final example. A friend opened a coffee shop in an old strip mall. He opened up shop, hired friendly people, and ran some very successful marketing events. Everyone loved him and the shop. One day, a water pipe burst and flooded the building. He closed up shop. I do not know if he had insurance to cover this, but I do know he never reopened. From Escape the Cubicle