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Business insurance

Reasons to insure business

Business insurance is a way to protect your business from disasters: from employee mistakes to natural disasters. In this case, entrepreneurs need to resort to the services of insurance companies.

Starting a business inevitably entails risks. Entrepreneurs, especially beginners, cannot always predict their consequences. All risks can be divided into two groups: external and internal. External risks have nothing to do with the company’s business processes. These include:

  • risks of increased competition;
  • changes in the economic situation;
  • man-made disasters;
  • natural disasters;
  • socio-political factors;
  • changes in legislation.

Internal risks are directly related to the activities of the organization so that some of them the entrepreneur can prevent. But, all the same, business insurance is necessary if an entrepreneur wants to maintain his place in the market. Internal risks include:

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  • production risks (equipment breakdown and resulting downtime);
  • commercial risks (loss or damage to goods during transportation);
  • financial risks (failure to fulfill obligations to banks, for example, inability to repay a loan);
  • human factor (erroneous decisions of employees).

Business insurance against risks will help minimize losses. Under the terms of the contract, upon the occurrence of an insured event, the insurer will undertake the obligation to compensate for the damage.

How to choose insurance services

To understand which insurance products are suitable for a company, you need to answer three questions:

  1. What are the risks of the business?
  2. What is the probability of each of them occurring?
  3. What implications will this have and what costs will it entail?

After analyzing the situation, contact the representative of the insurer with the summary of the organization. The advantages of modern business insurance are in a huge variety of products, among which there are many chances to find the best one.

Additional options in business insurance

The basic business insurance package can be supplemented with the personal insurance service for employees. This will increase the prestige of the company in the labor market, help attract and retain promising employees. And for companies that pay taxes on a simplified income minus expense system, corporate employee insurance will reduce the tax base.

The following types of insurance are suitable for business:

  • Voluntary health insurance for employees – if an employee needs medical assistance, he will receive it at the expense of the insurance company.
  • Employee accident insurance – if an employee suffers an occupational injury, the insurance company will pay compensation.
  • Corporate accumulative life insurance – the company creates accumulative accounts for its employees and regularly transfers certain amounts to them. After completing the agreed period, the employee receives the accumulated money.

Small business insurance

The standard small business insurance package includes business interruption insurance: the insurance will reimburse losses if the business is unable to work for a certain period of time. In addition, other business risks can be insured. For example, there is business insurance against bankruptcy or breach of contractual obligations by the counterparty.

Typically, managers insure the property against fire, flooding, natural disasters, and unlawful actions of third parties. At the same time, the manager receives partial or full compensation. A legal entity or an individual entrepreneur can insure any property, including all types of transport owned by the company.

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