Selasa, 24 April 2012

Business Insurance, What Are the Chances of Needing It?

Importance of having business insurance
Insurance is still the most cost effective way for a business to reduce its operating risks, as all you need to do is make yearly payments and little else.
Instead of thinking about how much insurance is costing, think of how much money you would need to save to get your business started again if it was destroyed tomorrow.
Risk is not just theft or fire you know
Depending on your specific business operation, you are exposed to more risks than the standard ones that see to draw the focus of all business operators, fire or burglary.
Imagine what it cost you to protect your business from these risks.
  • One employee assaults another employee while at work
  • You break your own arm playing sport and now can't do your next two months work schedule
  • You lose you laptop with all your business documents and forms. It was over a year ago you did your backup, and now you have to rewrite all those documents
  • Two chemicals in your cleaning cupboard accidentally mix and cause an evacuation of the entire street with several people needing hospital attention
Yeah, but nothing has happened so far?
I know that most business owners believe that because nothing bad has happened so far, that they are safe for the next few months yet. Wrong, this shows how little they understand of insurance risks and the chances of events happening.
Chances of something happening
The first thing to understand is that probability, or the odds of something happening, has no connection with the days gone past. For example, if I toss a coin in the air it will land either heads or tails up. This will still be the same chance of either, even if a head was just thrown.
This is because there is no casual link between chance yesterday to today. In other words, the chance of you needing insurance today is the same as if 10,000 days had already gone past without an event. It could still happen today.
The biggest factor that impacts on needing insurance
It is the human factor, that increases the need for insurance, because we increase the chances of something going wrong in our business every time we perform or don't perform an action.
Reading the news it is clear that most businesses have disasters because of something an employee or owner did wrong in the workplace.
  • Putting flammables to close to heat sources
  • Incorrectly using equipment or vehicles
  • Not cleaning up as soon as possible
  • Taking shortcuts in work processes
  • Not repairing or fixing faulty equipment
  • Overloading electrical points
When you think about the number of times you and your employees use equipment, heat sources, chemicals or take shortcuts everyday you can see that you will need insurance at some time.
Remember the more often you perform an action, no matter how trivial, the more likely something will go wrong.
How does insurance help
The human factor in accidents is well known and cannot be completely removed. In fact, trying to remove the human factor in accidents is very costly and still not 100% effective.
This is why has a place business insurance , even though there is a cost, because it will help cover your business when the human factor trips your business up.
When you think about the costs of trying to make your business totally protected it becomes much cheaper just to pay the insurance and get on with running your business.
Information supplied by Paul Baker
Over twenty years of business development & change management strategies successfully used in National organisations across Australia. The focus is on continuous improvement of business systems to stimulate growth through our principles of Initiate, Inspire, Innovate.
Customer-centric focus using our extensive experience in consumer behaviour and business process operations to find ways to help business owners manage their organisations.