Insurance is one of those things everyone feels they don’t need—until they need it. If you’re operating a small business upon which your livelihood and that of your employees depends, you really can’t afford to operate without it.

Here’s what happens when small businesses skimp on insurance.

Natural Disasters are Becoming the Norm

The frequency and intensity of natural disasters are on the rise. Volcanoes erupting in Hawaii, floods in Texas and wildfires in California are just a few of the issues making ever more prolific headlines of late.

However, what you don’t hear about on the six o’clock news is all of the business that go under as a result of these catastrophes. The cost of rebuilding your company, or the revenues lost when your customer base is decimated can be too significant to endure without adequate insurance.

Other Causes of Business Interruption

By the way, if you’re thinking the odds of a natural disaster are too low for your concern, consider how often power outages occur. Business interruption insurance also covers your losses if a power outage knocks you out of the game and inhibits your ability to earn.

What if a key supplier’s operation is rendered inoperable? How will you meet your orders if you can’t get the raw materials you need to create your product or perform your service? Contingent business interruption insurance will afford you a degree of protection in those instances.

Having this coverage could well be the difference between continuing as an entrepreneur or being forced to look for a job.

Homeowners’ Won’t Cover You

If you’re operating out of your home and think your homeowners’ insurance policy will have your back for a business-related incident, you’re in for a rude awakening. Homeowners’ claims arising from damages or injuries sustained during the course of business activities will be denied. Depending upon your situation, you’ll need small business liability insurance, along with business personal property insurance. You might also require on- and off-premises liability, as well as errors and omissions coverage.

Loss of a Key Employee

By and large, when you’re running a small business, the catalyst fueling your business is you. If you don’t have key employee coverage on yourself and you suffer a debilitating injury, your company could be dead in the water until you recover. Key Employee insurance will compensate your business for the losses incurred until you do, or a suitable replacement can be found.

These are just a few examples of what happens when small businesses skimp on insurance. Yes, you might hear all sorts of people around you decreeing insurance to be a scam. But you can bet those are people who have yet to be financially impacted by forces beyond their control. Again, insurance is one of those things a lot of people think they don’t need—until they do.

Don’t let one of them be you.