I recalled back then in school I was taught that insurance is a pool of risk but guess I didn't understand but now I do. The world we live in is a word filled with uncertainties and risk, Be it family, individuals, properties (home, real estate), business including assets which are exposed to different types and levels of risk.
Speaking of the word insurance it can be termed as a contracts which is represented by a policy in which individuals or entities receives a financial protection against losses from any insurance company. It is also noted that the insurance policy are used to hedge against the unavoidable risk of financial losses either big or small.
However, insurance is a pool of risk as much as it is, insurance can be tricky because, it's not like buying shares or clothing because there are more to that. When buying an insurance you should know that you are indirectly buying a lifetime promise. Yes it is a promise in the sense that if something disastrous happened to your business, your career is likely to assist your business grow back again. I tell you even though it's very tempting to question the worth of an insurance due to its tangible products and services.
Now let's go to the context of this article and take a big pictorial view on the importance of insurance and why it matters a lot in today tech World.
7 importance of insurance
Below are the tips you should know about insurance.
1. Insurance helps to bring stability in business and in family
In as much as it is a pool of risk, insurance is a safety means when risk gets wrong. Life insurance can help the life of family, should in case a member gets lost, same way it is for business. Incase a piece of equipment or a key member gets out of commission, the business can still carry on. that is why insurance seems so important at least there is this peace of mind that comes knowing that insurance when activated, can make the policy holders complete again.
2. Insurance is a wise decision
Insurance seems to be right thing to do and an example of an insurance which is on motion is the west fertilizer Co. The explosion in Texas in this spring. having said this the explosion did $100 million damages in a community which includes schools and hospitals. The fertilizer company had just $1 million as a general liability coverage. apparently, the city is suing the west fertilizers and are likely to win all of the companies retained properties and likely assets that were not even damaged by the destruction. now you may wonder why?
This is because the fertilizer company does not have a sufficient insurance. so to that effect, the city is suing even the suppliers to the fertilizer plants with the claims they had already knew they were to supply unsafe materials and should in case the west Texas or plant explosion, the insurance will have to assist the community recover after its crisis.
3. With insurance peace of mind is guaranteed
This is one unique thing about insurance it provides another interesting services which is the peace of mind in case the business owner take some certain risk on business ventures due to the fact they can shift the risk.
4. Insurance gives protection to the small guys
Don't mind the title "small guys" but when you look at an industry you see the small and big guys and if the risk goes wrong, you will see that the big guys tends to get back on their feet easily and move on but as for the small guys, they can't take the hit and as a result of this, they are more risk-averse and in different cases they sell out to the big guys. Even if a large number of small guys leave the industry one big guy can swallows them all. With the help of insurance, the little guys gets the support they want to take a risk which helps them stick much longer. this also means that insurance helps to prevent monopolizes from farming
5. Insurance is mandatory in some States
Insurance in some States serves as a law and this makes insurance relevant and compulsory. a noble example of this is an auto insurance. In Wisconsin, auto insurance is made mandatory(home of HNI HQ) Auto insurance helps to mollify the risk of lives on the road and of which there are so many. Also, the worker's compensation is a compulsory form of insurance required in most States.
6. Insurance keeps the Trade going
Many days ago, after the 9/11 attack there were severe panic about the insurance coverage. The Acts of war are never covered by insurance. let's think for a moment what's terrorism an act of war? And this happens to be what the big question was, How could the 9/11 attack be classified? Lucky, the insurance industry decided that the attack was never an act of war.
Moreover, after the 9/11, some of the insurers began to exclude terrorism. but then the Federal government came in and required coverage in attempt of keeping the commerce/trade going. So in this case, insurance is likely to prevent many business from avoiding terrorist-targeted operations Like the chemical haulers and refineries.
7. Lenders needs insurance
It is required that you have an insurance. let's think about this, the mortgage lenders needs an evidence of insurance before you can buy or even build a new house. in fact, to get sufficient fund for your business and to make it grow even bigger you are likely to enjoy the benefits of an insurance, because without an insurance your growing business cannot get the funds required to take it to the next level or your established business will not get the funding to evolve completely.
Finally insurance is something many business owners don't have to reconsider or think about it, whatever the case may be whether you think about insurance or not, with hopes it's there, it should be allowed for the transfer of risk to provide a safe means for more advancements opportunities.
Thanks for reading.
