Business Insurance - Lets be Safe while Making Money

A business is not simply a way of generating income, it is lifestyle statement, and it is an identity assertion and like anything else that is important in our lives a business too needs care and protection. Just like we look after our health and take constant precautions not to fall ill, similarly a business too needs precautionary actions to protect it. There is every need for business insurance and it has become a necessity that must be invested in. There are nay sayers who always question the need and wisdom for taking a business insurance coverage to protect one’s livelihood. What they fail to understand is that life is long and cash flows may fluctuate or fail due to myriad reasons.  One simply cannot behave like an ostrich burying one’s head in the sand and pretend that all will be well. It’s all about planning ahead and playing safe...and when the lives of employees and families are involved, the responsibilities multiply.

It’s ironical but even a business that is a loss making proposition needs protection. This may seem ridiculous but one must always keep in mind that no matter how small or unsuccessful, a business can be sued and money claims may be filed for and passed by courts of law. This is irrevocable and the worst case scenario can even mean bank accounts and assets being frozen or worse still, office space and equipment being seized to pay off debts and legal claims. Even personal assets like an inherited home or a family car can be dragged into the fray and a tenacious legal opponent can leave a businessman destitute. Moreover for businesses that work as partnerships, in the situation that one partner is disabled or dies or even wants to opt out of the business for any reason, there may not be sufficient liquid funds available to the remaining partner to enable him to buy out his ex partner’s stake. Many a business has gone awry between a tussle between erstwhile partners and family members.

Like a visit to a doctor where one keeps a tab on systems, reports to the expert for his opinion and follows his advice…similarly business insurance too needs careful watching and planning. One needs to carefully analyze one’s requirements, zero in on areas of vulnerability, and be aware of risk factors because essentially business insurance is all about risk management. The person seeking business insurance needs thorough education about the different kinds of policies that are available in the market. An insurance advisor needs to plan his client’s coverage and execute his policy requirements right from collecting relevant data to tweaking his premium to extract maximum mileage for his client. Moreover once the policy is chosen and the premium paid, the work doesn’t stop there. There should be continuous reviews of the policy to keep tabs on any add on features that should be included. New policies have updated features and the insurance advisor’s job is to keep his client clued in about these new developments so that he understands exactly how his coverage can be extended or improved at minimum expense.

Business insurance is an extensive term that covers several heads all at the same time. The extent to which each head is covered depends on individual business requirements.   There is worker’s compensation that provides coverage for injuries that might happen while a worker is on the job. Thus all his medical and other requirements are taken care off without creating a hitch in the smooth running of the business. Property insurance casts a protective ring about the business premises whether rented or owned. Then there is liability insurance that protects a business against negligence and malpractice suits. In fact some insurance companies even include business interruption coverage in their business insurance package. If there is a stoppage or depletion of the cash flow for any reason, damages that may be incurred in that period may be covered. Thus business insurance is important to any and every business man who wants to be safe.

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About the author

Robert Ellis is a freelance insurance advisor who provides suggestions to clients on various aspects of business and professional insurance cover. He is associated with Bizcover.com.au and provides guidelines on accounting insurance, professional indemnity insurance, IT insurance, business and office insurance and more.

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