Business insurance against risks: features, types and recommendations

Even the most adventurous and bold entrepreneurs are thinking about the possibility of some risks. This excitement multiplies many times, if a person is engaged in the business of his whole life. In this article we will consider what is business insurance, as well as its main varieties.

How did this notion

To begin with, we need to understand what the essence of the market economy is. This concept means relations between different economic entities. This can include the state itself, as well as its citizens. At the same time, market relations are the purchase and sale of certain goods and services, where some entities turn out to be sellers, while others are buyers.

In the process of such interaction there is a fierce competition. Therefore, in order to preserve their opportunities in the market, the actors begin to act rather risky. Precisely because of the presence of such risks, there appeared such a branch as business insurance. This type of activity can significantly help in reducing possible economic risks.

Of course, independent business management is quite a complex and responsible process, where every businessman bears full responsibility for his property. Business insurance will help protect individuals from possible risks of failure. However, it should be borne in mind that, just like running your business, insurance will require you to make certain financial expenses.

The main reasons for the decline in profitability

Of course, it is not an easy task to create one's own company, but it is even more difficult to ensure its prosperity for many years. Is it too late for anyone, even the most popular and promising business, to fail. Consider the main reasons why this can happen:

• Changes in tax legislation, as well as depreciation of the monetary unit;
• Fires, accidents and natural disasters;
• The introduction of new laws restricting the conduct of certain types of activities;
• Mistakes made by company employees (human factor);
• Violations in the economic situation of the country can be the main reason for the decline in demand;
• Loss of the main specialists of the organization.

Nobody is able to accurately predict the main reasons why an enterprise may go broke or lose large capital. But in order to minimize the above risks, you need to pay attention to such a service as business insurance.

Risk and insurance in the business plan

Given the negative risks in the business plan, you can greatly facilitate your work, and save a large number of funds. Of course, it is absolutely impossible to foresee all the risks associated with your activity, but you can even reduce them to the minimum amount. To do this, you need to analyze the risks in your business plan, and be sure to take into account the ways to reduce them. Whatever you do, be sure to develop a business plan. Insurance will help you avoid negative consequences.

Small and medium businesses

Bankruptcy of the company comes when its owner can do nothing more to reanimate her. Small business insurance is a very reliable and sure way to not lose all the money as a result of the closure of your organization.

After receiving the insurance payment, you will have another opportunity to reanimate your business or start again something new. This method of combating risks is very effective in activities related to the provision of services or the sale of goods on credit and in installments.

Most often, business insurance includes such items: property insurance, liability and insurance against a production break.

Property Insurance

Imagine that you started a new business. To do this you will need to rent or buy a room, equipment, furniture and other items. All the property you have acquired or leased can be stolen or spoiled. So with the help of property insurance you will be able to return all the money you wasted. However, note: for this type of insurance you need to provide the exact cost of all purchased or leased goods of the insurance company.

Having formed an insurance contract, you can protect the premises, material values, goods, office equipment, equipment, as well as money lying in a safe or at the cashier.

In this case, the cost of insurance is calculated individually.

Liability Insurance

Such insurance can protect you if your organization has harmed the customer or has appeared to your goods and services claims.

To accurately understand the meaning of this type of insurance, consider an example. For example, you own a hairdresser. A master who works for you, unintentionally harmed your client's health and that requires you to pay damages. If you do not have the opportunity to pay it, then the insurance company will come to the rescue.

Insurance against production interruptions

During the operation of each enterprise, an unplanned break may occur. Of course, such breaks as holidays or employees' holidays can be envisaged, but what can you do in case of force majeure circumstances? For example, if there is a fire in your production?

All kinds of work will be suspended, so you are forced to spend money for recovery, compensation for damage, and you need to pay employees' salaries, taxes and so on. In this case, insurance against production interruptions can cover all your unplanned expenses.

Insurance and business valuation

Valuation for insurance is necessary for making correct calculations of insurance premiums.

Every modern insurance company must have a very clear and objective view of the value of insurance property. Independent insurance evaluation allows specialists to quickly assess all risks and make up an insurance portfolio.

Typically, insurance companies refer to third parties who are engaged in such calculations, and already on the basis of the data they put forward their conditions for the implementation of insurance.

Useful advice of insurance brokers

Business insurance ("Sberbank" also provides this service) must be carried out correctly.

Consider some important tips that can help you when choosing an insurance company:

1. Do not insure your favorite business at once "from everything." First of all, analyze your activity and take into account the maximum possible risks. Only then contact the insurance company. This will help you not only to correctly calculate your own funds, but also to conclude a proper and important contract.
2. Approach the choice of the insurance company consciously. Of course, there are thousands in the modern market. Do not take risks and choose only time-tested organizations.
3. Pay as much attention to the insurance contract. Completely study this document, because very often insurance companies leave a "hook", for which you can then be hooked. And believe me, it will not be in your favor.

Managing your own business is very difficult and responsible. It is very difficult to foresee where negative risks will be waiting for us. Therefore, it is always better to be safe. This will help you to protect yourself from unplanned expenses or even from bankruptcy. Good luck in your endeavors.