Babe Ruth was no stranger to changing the game on the field. Though he made his mark as a pitcher for the Boston Red Socks, he really took off once he signed as a slugging outfielder for the New York Yankees. By the end of his career, Ruth shattered records and made his name a legacy with 714 home runs, 2,213 runs batted in, and a slugging percentage of .690.
But it seems Ruth had foresight that matched his level of skill. According to The New York Times, the famed slugger was also a savvy businessman who understood the value of his physical abilities. The report states that in 1920, Ruth purchased a disability insurance policy from the Hartford Accident and Indemnity Company, which would pay him $200 a week if an injury or illness kept him from playing. He made $20,000 in 1920, but he spent more than $2,000 in premiums on four policies (and that was a lot of money at the time).
It's common practice for athletes to buy insurance these days, but back then, few pro athletes did, which is why Ruth's investments are so notable. And that's what small-business owners can steal from Babe Ruth's playbook: know the value of your business and invest accordingly.
A Swing and a Miss
You know what small-business owners have in common with other baseball players of yesteryear? Many of them don't have adequate insurance.
The exact number of businesses without appropriate business insurance varies by industry and type of policy. To give you an idea of how underprepared the typical small-business owner may be for disasters and lawsuits, consider that…
- 97 percent of small businesses don't have Cyber Liability Insurance, even though 71 percent of cyber attacks target them.
- 81 percent of all business tort liability costs are paid by small businesses.
- Nearly 60 percent of home-based businesses don't have business insurance.
- 40 percent of small businesses will likely face a General Liability or Property Insurance claim in the next 10 years.
By failing to carry the appropriate insurance policies, many small businesses inadvertently set themselves up for failure. After all, few businesses can recover from an unexpected data breach, lawsuit, or property loss by paying out of pocket. Doing so jeopardizes their finances and the future of the business.
Hey, Batter, Batter: Business Insurance Is a Home Run
Just like Babe Ruth was ahead of his time by purchasing insurance and understanding the value of his skills, you can be the Babe Ruth of your industry by staying ahead of your peers and purchasing business insurance.
And even though Babe Ruth was a successful baseball player with the resources to cover considerable insurance premiums, you don't have to make MLB money to afford coverage. For example, many small-business owners qualify for a Business Owner's Policy, which bundles General Liability and Property Insurance together at a slightly reduced rate.
Another thing to bear in mind? According to our 2014 Business Insurance Cost Analysis, the median price paid for insurance is $500, regardless of their industry, business size, or type of policy. However, the more policies you buy, the more you can expect your premiums to be.
For more on insurance costs and savings, read the full cost analysis report and check out our insurance savings blog series.