People often question why exactly it is that anything to do with business isn’t really just a scaled-up version of the same offering as it is presented to a private individual. For example, why does business insurance get a lot more complicated when the exact same insurer who offers private customer insurance is the one who also offers business insurance?
Well, it’s a simple matter of the manner in which business is conducted making matters just a bit more complicated because when it comes to a business we are dealing with a lot more moving parts than the life of an individual. A business, although if registered is legally considered to be a legal entity on its own (a “person” of sorts), does not have the capacity to make decisions on its own for example and requires the inputs of individuals who have a vested interest in its running, such as the board of directors, the CEO if it’s a publically listed company, shareholders, etc.
So when business insurance service providers come up with insurance packages for a business, all of these independently moving parts have to be taken into account, which is perhaps the primary reason why business insurance is considerably more expensive than individual insurance like life cover or household goods insurance. Insurance can be for a small or large business depending on the number of employees, capital, and investments. Similarly, the insurance factors, covers, and types also depend on the classification of business. For instance, small business insurance can provide liability cover, equipment protection, commercial property insurance, owner policies, employee compensation, etc. Moreover, the services can be availed by a construction company, cleaning facilities, craft makers, event professionals, and many more.
Expect to Pay More
So we’ve already led into the cost aspect of taking out business insurance coverage in that you really should expect to pay more. One of the main reasons for this is that a business typically has higher value assets which would need coverage, a simple example of which would entail a Laundromat with commercial grade washing machines over say taking out insurance on the domestic-use washing machine you have at home. You would need a lot more money to cover commercial grade goods as used in a business setup than domestic goods, so expect to pay more.
Different Types of Insurance
It’s perhaps true of our personal lives as well, but it’s most definitely the case with the operation of a business that there are different types of insurance you can and should be looking at. It isn’t just physical assets and tools which need protection against the likes of theft, damage, etc. Some important assets are people, such as the owners, high-performing salespeople, or similar individuals who are critical in the ongoing business process. The key person life insurance is to protect the company from the untimely demise of such people. Intellectual assets and cyber security add to the complexity of business insurance. All you have to do is take an account of what it is you have at your disposal which allows your business to thrive and gauge whether that needs protection or not and if so, just how much protection is required.
Legal insurance is also something which should come in for some serious consideration because this is how some of the biggest companies in the world save millions upon millions in what would otherwise be heavy legal fees. So instead of perhaps having to maintain an internal legal team on the business’ payroll, something like legal insurance will do well to have you paying a modest monthly fee so that should a legal matter arise, you have the funds available to get good legal representation.