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Protecting Your Business From Risk

 

Taking risks is a necessary step on the path to entrepreneurial success. But, as with all aspects of your company, even the risks you take need to be accompanied by a contingency plan. In a situation of difficulty, would your business have a strategy to rely on that would get it out of trouble? When you really think about the possible consequences of even short delays in production business insurance might well be worth the cost of the premiums.

Before selecting an insurance policy it is a good idea to make a thorough assessment of the needs and possible weaknesses of your business. Your particular situation will determine which type of business insurance is most suited to you. There is a wide variety of insurance packages available that can protect not only the obvious assets, such as your vehicles and offices, but the less obvious, though no less important things, such as loss of critical team member skills.

So what are the different options when it comes to protecting your business? First, there is insurance that covers business owners, partners, and team members. Here, a life insurance policy can be a wise move, especially if you are the sole proprietor of your company. This is because, as a general rule, a business owner is responsible for all the debts of his or her company. Life insurance offers good protection to the policyholder’s family.

Another option is disability insurance. Since your business’ profitability probably relies on you being able to take an active, continuing role in the company, a policy that insures you in the event of disability is an excellent idea. Many disability insurance packages provide cover for as long as one year, with the plan also covering expenditure made in relation to an injury or disability suffered at work.

Other possibilities include partnership insurance, which would provide financial support for your business partner, and the business itself, if you were no longer able to participate in the company’s operations. Critical illness insurance can provide cover in case of certain debilitating or life threatening illnesses.

Business insurance can even allay that ever present fear that you will lose a valuable team member for one reason or another. Policies that fall under the heading of Key Person Insurance can compensate for the departure of a team member who played an important role in your small business. Such cover can also apply to situations in which a valuable team member is temporarily unable to work due to injury or ill health, though it won’t cover loss as a result of resignation.

Of course, business insurance extends beyond protecting your team members. It is also an important way of making sure that your business assets and property are covered. Vehicle insurance, for example, means that the car you use for business purposes will be covered in the event of an accident that occurs in the course of business. Often, personal vehicle insurance does not cover mishaps that are business related, so additional protection is important in this regard.

To compensate for theft or damage to your property, business premises and content insurance is essential. Sure, you can opt to not take out a premises and contents policy, but the canny business owner knows that accidents do happen. A comprehensive property insurance structure will give you peace of mind, and that added degree of protection in the event of damage.

Before you decide on the right business insurance for you, make sure that you develop a strategy that takes account of the risks that your business is likely to face. Also, try to implement a risk management programme, which will reduce the likelihood of you needing to rely on insurance at all. A contingency plan can also be helpful in case loss does occur.

And once you have a good understanding of the areas of your business that most require protection, speak to an insurance professional. We can complete an appraisal of your business and tailor a solution to your needs. Only when you find the right business insurance, and receive expert advice to go with it, can you feel fully protected.

Until next week,
Mike Reddy
www.syb.com.au