Chapter 3: Special Insurance Considerations for Freelance Architects, Engineers, and Designers
Part 3: Why Starting and Stopping Insurance Coverage Can Cost You
Sure, when you're a self-employed architect, designer, or engineer, every penny counts. And when the economy shifts and work dries up, it can be tempting to drop your business insurance coverage, skip payments, or simply "forget" to renew your policies.
But starting and stopping insurance coverage never pays off. Especially in the design industry, insurance protects you from unexpected risk exposures that could bankrupt your business.
Let's pretend you dropped your insurance coverage. In the meantime, a client sues you for professional negligence (there's only so much risk you can transfer through your contracts). Now you have absolutely no financial safety net for the rising attorney's fees and upcoming settlement costs. You'll be responsible for paying all those expenses out of pocket.
In other words: if you don't think you can afford business insurance now, how could you afford a devastating loss in the future?
Small business insurance should be viewed as an investment — in your business and your future. It's a way for you to protect your business and grow. Business insurance gives you the financial security you need to take on riskier, bigger, more innovative, and more lucrative projects than you could without coverage.
Small business insurance is an investment in the continued success of your startup.
NEXT: Chapter 4: Insuring Your Engineering, Architecture, or Design Firm