In a consumer society, the name of the game is to buy things to use, consume, display or wear, so within that context, insurance is an interesting concept. As consumers, insurance is the one expense we gladly accept but never want to use. Put another way, we spend money on insurance then hope that we never have to claim it. The reason, of course, is that making an insurance claim means that something undesirable and even tragic has occurred, and none of us want to be involved in that situation.
Imagine then, that you are a business owner, relying on the profits from the business to pay staff and also to pay yourself. Insurance, for all kinds of potential losses associated with being in business, is absolutely essential. In fact, it is the only reason that many businesses that are damaged or totally destroyed by fire, for example, ever get back to trading.
Types of Insurance Risks for a Business
Of course, there are other risks besides fire that a business needs to consider when purchasing insurance. Regardless of the different types of insurance available, generally they can be grouped into four main categories. They are employer liability or workers’ compensation insurance, property or assets insurance, product/public/professional liability insurance and vehicle insurance.
Within those four main categories are many different types of insurance. Just a few are burglary, business interruption, loss of money, goods in transit, electronic equipment and employee dishonesty. However, there are many others, all with different conditions, different premium rates and offering different levels of coverage depending on the company the business is insured with. This complexity is the prime reason why any business owner should be using a specialist business advisor to assess the insurance needs of the business, rather than trying to sort it out themselves.
How can an Expert be of Benefit?
Engaging an expert to assess the business’s insurance needs takes the stress and emotion out of the picture. The advisor will look purely at likely risks and provide information and recommendations on that basis. The business owner is then able to act on the recommendations without getting tied up in process or responsibility.
Next time you are talking to your accounting advisor, start a discussion about insurance and how their business advisor can help you assess the risks to your business and check your current policy or policies. It is almost guaranteed that there will be changes needed to your insurance mix, and perhaps even savings on premiums, all gained through using an experienced advisor.
