Insurance Types Business
Insurance Types Business
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The Value of Insurance For Business Security
Insurance is often undervalued, frequently because people have a narrow mind when it comes to the insurance business as a whole. However, insurance helps to give security to business dealings. Here is a look at how insurance can give your business security.
Insurance is a swap:
All types of insurance do one thing – they exchange a small, certain payment for a large, uncertain loss. Basically, this means that you pay a small fee and fixed intervals (your premium), and the insurance company will take the risk should any losses ever occur.
Take, for instance, a flood. Floods are often destroying business property and inventory, but it is impossible to know when one will, if ever occur. If you were able to tell when a flood would occur, you wouldn’t need homeowner insurance (http://cheap-insurance-rates.com/home/denver.cfm). But because you can’t, taking out a flood insurance policy can help you to replace the things that you lose when there is a flood.
Group statistics can be calculated:
While you cannot tell what your chances of a flood, fire, or other disaster will be, your business group as a whole has set statistics. For instance, if you own a bakery, your risk of having a fire destroy your business is higher than the risk of a fire taking down an office building. Knowing that, you could decide that as a bakery owner, your risk of having a fire is higher, and you therefore need more insurance. If you are an office owner, you could decide that your risks are lower and that you need less insurance. Every business and every individual needs certainty, and insurance can help to provide certainty in an uncertain world.
All insurances are similar:
Fire insurance is not terribly different from flood insurance, and flood insurance is not any different than life insurance. To a certain extent, all insurances are the same. If you work with life insurance, then you know that approximately 3.8% of people die before they are 25. This means that another 96.2% don’t, but you have no way of knowing which of the two groups you will be in. All you can do is calculate your personal risk. The higher your risk, the higher your premium will be.
This is true of all types of insurance, including home owner’s insurance. Property owners never know how good their title is. A merchant doesn’t know how much he will lose on a given debtor. However, when you look at a large enough group, you can get an idea of what your individual risk is. Everything you do in business has a certain risk to it. On your own, you cannot determine what the risk is, but as a member of a business group, you know what the statistics are for that group.
What insurance does for your business:
Business has risk. There is the risk of losing property, losing life or health of employees, or losing money, among others. What insurance does is give you some guarantee against these losses. By knowing what your risk factor is, and insuring it appropriately, you will know that you have what you need sure an incident ever occur.
About the Author
Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in business, finance, and insurance. For a free
home owner’s insurance
quote, please visit
http://cheap-insurance-rates.com/
.
A friend of mine is starting a carpet laying business – what types of insurance should they consider?
What types of insurance should somebody with their own business consider?
Income Protection, Life, Professional Indemnity, tools & equipment, sickness & accident, health…??
Thanks.
I’ve had a carpet laying business before. You can spend more money on insurance you dont need, it’s incredible.
You can’t lay carpet alone, you need help…either an employee or a partner in the business. It’s very, very easy to screw up you back or your knees in this business. Who is this help going to be and how are the medical bills getting paid. Very important to know the plan here.
You will encounter a few wonderfull customers that, despite the fact that you emptied the rooms and stripped the walls…. you still managed to break a 50k dollar ming vase… you NEED an insurance company to deal with that crap. You don’t want to deal with it. You wont have time if your making money and it’s a bunch of BS anyway, but it happens.
The truck…. It’s cheaper to use your own truck, which will not have a happy life, but buying another insurance policy kills alot of profit. Next, is to lease, short term, low miles, if your urban. If your rural, forget it … the miles will kill the deal. I’ve got decent deals buying used rent-a-vans from rental companies and insuring them under my own name. I try to get 2 years out of a truck. It depends on the situation. I had a friend who was so busy, he found it cheaper to rent vans and give them back every month and write the whole thing off on the business. Remember, trucks don’t last in this business, and basically get the liv’n crap beat out of them every day if your busy. If you know your going to work where you have to worry about your truck and you can’t keep an eye on it…. the rules change. It depends on the situation. My best deal was a couple of used 1 ton handicap vans. 4k each, with a lift that I converted into a fold out bench for cutting aluminum, tile, and fixing tools. I insured them myself for half the price of commercial and they had a high top for carrying a lot of pad. The vans where really maintained …. owned by a local hospital… with all service records. Both where junk when I got through with them, but they made me a ton of cash.
Tools… carpet tools are cheap… no need to insure. But, I try never to take jobs where other installers are working. Lost a power stretcher and a couple of staple guns like that.
Last… once the carpet is on your truck…it’s yours, until you get a check. I never leave a job without a check or my carpet. I don’t know of any insurance that covers bad carpet and still lets you make a profit. CHECK your carpet before you leave your supplier, don’t worry about insurance. I don’t like my carpet being delivered to the job unless I’m there to inspect it… all of it.
Good luck to your friend, this is a tough biz, and bad for the body. Get busy, make your money, keep your expenses including insurance down, and get out. I don’t recommend this as a long term gig………. Been there.
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