When a business opens its doors to serve customers, whether it sells products or provides services, it is taking risks. There is the possibility of a customer reacting to the product or being dissatisfied with a service, enough to sue you for it. Workers’ on the business premises could get injured at any time while performing their duties and will need medical attention as a bare minimum. The risk could be worse if the injuries are so severe that workers opt to sue for compensation. Lawsuits are an expense that every company can do without, yet they are so costly that not taking insurance is not an option. In Singapore, businesses are required to have commercial motor insurance and work injury compensation coverage.
In the following article by aspire, the article discusses the importance and cost of business insurance.
How do Insurance Companies Calculate the Cost of Business Insurance?
Running a business is, in equal parts, exciting and challenging. There’s no denying that it’s a task fraught with as many risks as opportunities. Think about a fire destroying a retail store, an employee meeting with an accident while travelling for work, or a lawsuit threatening a business’ existence. Without the right insurance policy, such situations can cause unimaginable hardship to everyone involved.
So, instead of exposing your business to risk, it is wise to get started with understanding the basics of business insurance and following it up with investing in the right coverage. Read more here
Cost of insurance is a concern shared by small business owners. The mandatory covers make the situation more challenging for businesses without sufficient cash flow. Even large corporations have a difficult time setting aside funds to meet their insurance needs. However, understanding how insurance companies determine the cost will help businesses understand why they pay the premiums that they do. Insurers look at the size and nature of the business, and the type of cover needed. Before settling for a specific insurer, compare the rates from various companies and choose one that works best for your business. However, business owners need to be wary about choosing a company based on the price of insurance only because low premiums often translate to low compensation.
How Businesses Benefit from Business Insurance
“In many cases, when running your business, you are highly likely to face a considerable number of risks. Maybe it is the case in which your inventory gets destroyed by fire, or one of your employees gets injured while working. With the protection of insurance, you can minimize the cost when these risks unpredictably happen.
In this blog, let’s go through some of the main types of business insurance in Singapore that your company needs and dive into how they work.” Read more here
When entrepreneurs use their life savings or seek financing for their startups, they do so with optimism, hoping that the business will thrive. Unfortunately, they also know that they are taking a risk. They know the business may make profits or incur losses. Taking business insurance also involves some level of risk. Paying insurance premiums may seem like a waste of money when the business doesn’t face any disaster. However, since the future is unpredictable, you never know when the coverage will save the day. Mandatory insurance covers can feel like a noose on a business, but when employees are more confident working in a business with coverage because they have employment and financial security.
Randa Kriss, in her article on fundera.com, gives guidance on steps businesses need to take when seeking insurance.
Why Risk Assessment is Critical When Purchasing Business Insurance
“Whether you’re the owner of a brick-and-mortar shop or an online-based contractor, finding and buying the right small business insurance is essential to protecting your operations from the unexpected. However, with all of the different types of insurance out there, as well as providers to choose from, you might be wondering exactly how to get business insurance.” Read more here
Given the array of business insurance policies and the range in pricing, it can be a little difficult for small business to determine which policy is most critical, especially when the company’s budget can only accommodate limited coverage. Since insurance is a safeguard against risks, it makes sense to carry out a risk assessment to classify the level of risk and invest accordingly. For example, a manufacturing business carries greater risks than a home-based e-commerce company. Both may be small businesses and may even be the same age, but one carries greater risks and may need more coverage.
Business insurance is sometimes unavoidable, especially if it is mandatory. It is risky to run a business blindly, with no idea what you would do when things go wrong. Having no business insurance is like driving a car without insurance. An accident could occur, or you may be sued for negligence. The risk level increases as the business grows, and without the right safeguard, some events can cripple a business, enough for it to close. Keep your policies updated, depending on the changes in your business to prevent out of pocket payments because of insufficient coverage.