Business organizations are always at a risk of losing a considerable amount money as a result of accidents, unexpected economic changes, unfavorable court verdicts and decisions, etc. These unexpected events may also result into loss of revenue, loss of assets, etc. On the whole, business organizations have a high probability of suffering from losses.
In the uncertain business world, insurance coverage is a very important requirement. In the cut-throat competition, unexpected and sudden business losses, hurt a lot especially in terms of revenue. Hence many proprietors of small business organizations prefer to avail the insurance policies, that are tailored according to their requirements.
The following are some of the important insurance policies that should be availed by business organizations that are small in size by the virtue of business turnover, as well as in terms of manpower.
The working space is an important aspect of any business. Damage or loss of this working space will result in heavy revenue losses and hindrances in operations. This in turn will affect the inward cash flow of the company. Hence, in order to cover all possible threats of losing the place of work and operations, it is necessary to have a good coverage for the property. The small business insurance, in such cases basically depend on the surface area of the property and its market worth.
Many business organizations depend on automobiles for their business. Businesses such as tourism business or logistics have their operations concentrated around the use of cars and automobiles. In such a case, these business organizations must have auto insurance policies.
Some small-scale business entities such as restaurants or grocers shops, also have small pick ups for delivery of goods and providing services. Damage to these business utilities will freeze the operations of businesses. Hence such aids to trade should usually be insured by the small businesses.
Many small businesses own and operate small-sized workshops with only a handful of people operating it. Workmen in such workshops often face health hazards. Hence it is recommended that such organizations provide their workers with health insurance policies. There are some other insurance policies that proprietors themselves can undertake.
For example the insurance policy that becomes applicable to the proprietor when he travels abroad while on a business tour, or the one the covers the medical expenditures that are incurred by employees during the course of their employment. It must be noted that health related expenditure is heavy and the same time, it cannot be ignored.
There are several occasions, when people sue business firms over some or the other issue. If the verdict of the court is not in the favor of the defendant, then the business will have to pay some heavy compensation, as ordered by the court, in a lump sum or in a structured settlement. Nevertheless, this amount is not a small one, and hence a small business also requires a liability insurance coverage, which will take care of the settlement.
The cost of insurance will basically depend upon the insured person, or the element that has been insured. The requirements are not all stringent and usually have a minor premium. Though these insurance coverage for small businesses are not mandatory by law, it is advisable that one insures such elements of a small business organization.
By John Hester