The Truth Behind Company Insurance
by Fred Roed on 23/06/09 at 10:11 am
6 comments
The ultimate grudge purchase for any entrepreneur, company insurance, is one of those things that you look at in your profit / loss statement and go “Why do I even pay that? Is it really necessary?” It’s the kind of thing that makes me toss and turn at night… not because I’m paying too much, but because I wonder whether I’m making the right choice. “Did I miss some small print? Do I need more insurance? Am I using the best insurance company?”
Think about it: When was the last time you claimed from your company insurance?
I’ve had insurance for the 6 or so years since I started the humble digital marketing company that I run, and I’ve never had to phone any of the business insurance companies that I pay each month. The only time I contact them is when my admin team lets them know about the new equipment that needs to be covered.
So, after thinking about these questions, here are three most important pointers when thinking about company insurance (in my short experience):
1. Company insurance is a necessary evil
I won’t even elaborate here. You know it’s true, even if you try and rationalise against having company insurance – It’s like air conditioning in Durban; you just gotta have it. The weird thing is, an alarming number of businesses in SA are under-insured. Are you?
2. The more insurance you have the better
Since my business partner and I started our company, we’ve been adding more and more insurance to our various policies as the business progresses. Now, you may be thinking “Wow, you got suckered pal!” – I think we’ve done the right thing. Looking at the various items insured in our sphere – from life to equipment, injury to data – it’s all worth protecting.
3. There is more than one kind of business insurance – and you need to think carefully about your choices
Now, I’m not a huge fundi on the various “big corporate insurance” options (for that you need a specialist business insurance advisor) – but I know that there is more to insuring your small business than just the stuff that you’ve got lying around. In our case:
- We’ve insured all our equipment, our data, our employees and our lives.
- We’re also insured against injury or death to the main protagonists in our partnership – this is “Key Man Insurance” which is something that you should seriously think about if there are critical skills that certain people bring to the party. This is quite an important item you need to think about.
- Also, if you’re married and / or have kids, leaving this mortal coil without some serious safety net in place for them is just foolish.
- One more thing – we’re also protected against business interruption. Not something that
Here’s hoping you sleep well tonight!
Fred Roed is the marketing guy in the Ideate crew. Fred is the CEO of web marketing company World Wide Creative and the co-founder of online learning portal Heavy Chef. Fred loves writing about people out there doing marketing right. Follow Fred on Twitter here. View more articles by Fred Roed.
Tags: company insurance, insurance companies
Mattwi
Jun 23rd, 2009
As someone who works in commercial insurance, I couldn’t agree more. If you haven’t claimed, fine, but I deal with commercial claims all day long, and when you have to make a claim, you want to make sure it’s as painless as possible. My advices is:
READ YOUR POLICY WORDING
Register a Company
Jun 24th, 2009
Great article, all insurance is a necessary evil, and we wonder why we have it when it comes time to pay the bills. However, when something happens, you will be very grateful that you kept paying those bills. As you say, just think about the value of what you insured…
Top 6 South African small business opportunities for 2008….Part 2 — Ideate – Small Business in South Africa
Aug 27th, 2009
[...] developing world. Instead of owning a car full-time (paying for it via higher purchase, maintance, insurance, cleaning), imagine you could conveniently rent a car for short trips whenever you needed one. It [...]
The Stockdale Paradox — Ideate – Small Business in South Africa
Sep 1st, 2009
[...] (and surety), the cost of setting up (and surety when the funds are borrowed), the security and insurance costs, the costs of stock, [...]
Friday the 13th is cool for business — Ideate – Small Business in South Africa
Sep 10th, 2009
[...] accidents that occur of Friday the 13th are actually less than on any other Friday. The number of insurance claims made to Barclays Home Insurance on Friday the 13th are about 15% less. The drop included a fall in [...]
Small Business HR and Employment #4: ‘Blue Sky Thinking’ | Ideate
Sep 16th, 2009
[...] etc. It would take time and money to find and or train a new person to fill the position. Key Man Insurance will pay out a lump sum to finance the [...]