What is Business Insurance & Should You Use this Insurance?







Entrepreneurs from various industries share some common concerns. The most frequent are related to the company's financial results. However, we must also worry about preventive issues. This is when business insurance is needed.

Relying on insurance can provide a number of benefits that we will see in this article. In addition, we will also explain what it is, how it works, and what types of covers it covers. So stay tuned and check it out!

What is business insurance?

Imagine that an unexpected storm occurs and your business is invaded by the waters of this rain. Probably some equipment and the structure of the building would be damaged, paralyzing its activities until all was resolved.

Bringing this to a financial perspective, each day stopped represents a value that goes out of the box and every repair is a value that comes out of the coffers. Depending on the extent of the damage, this can lead to the company closing its doors permanently.

Business insurance aims to minimize all this problem. For this, it offers several types of coverages that can best be combined for each type of company. Thus, the time and expense of recovering a claim is much shorter, enabling a faster return to business.

How does this type of insurance work?

Business insurance works in a manner very similar to any other type of insurance. First, you must list the risks to which the company is subject. This can vary greatly depending on several factors, such as:

  • geographic location;
  • company activity;
  • type of machinery used;
  • assets that the organization has;
  • company size.

Then the insurer will do an analysis based on 2 important factors. The first of these is the probability of a claim occurring. The second is related to the chances of this accident reaching the maximum severity. This enables her to determine the appropriate value of the policy, insurance deductible  and coverage.

Therefore, it is very important to thoroughly analyze the details before closing a business insurance contract .

What types of covers does it cover?

Business insurance can be contracted for various types of coverage. Below we will list the most hired by companies. Follow:

Materials damage

Material damage coverage includes damage to the building structure and equipment due to certain factors such as fire, explosion and electrical breakdown. This is a very important type of coverage, because the incidence of claims of this nature is more common than we think - or we would like, right?

Importantly, fire insurance is mandatory for all buildings, according to Decree 61,867 .

Natural disasters

Coverage against natural disasters involves damage caused by weathering nature. The most common are:

  • rains and storms;
  • hailstorm;
  • rays;
  • inundation;
  • flood;
  • wind.

Civil responsability

Liability coverage involves damage to third parties. This coverage is important because it mainly covers indemnities.

The most common claims in this mode are damage to vehicles parked on company premises, as well as physical damage to employees and visitors in the event of an accident.

Theft and vandalism

Theft, theft and vandalism coverage covers the damage caused in these situations in part or in full. The value of the insurance should be destined to the replacement of the subtracted assets and the necessary repairs, especially in cases of vandalism.

What are the advantages of having business insurance?

Hiring insurance for the company can yield a number of advantages. Let's highlight some of them below:

Tranquility

Every business owner is bombarded by a very large amount of trouble over the course of a day. This is part of your routine and is directly linked to your business. In this sense, the occurrence of an accident can cause very serious consequences, for which he was not prepared.

If keeping the company profitable in the face of competition is an arduous task in a normal situation, imagine right after the event of a claim? This is why business insurance is so important. It guarantees peace of mind for the entrepreneur, who will be better able to recover.

Property protection

The occurrence of a claim is largely unpredictable. However preventive measures are taken, it is impossible to avoid 100% of events. A very good example are storms. You can't prevent them from happening. It can strengthen the company's structure, improve water runoff and even install a lightning arrester, but it can still be damaged.

With the help of insurance, your company can repair the damage and replace lost equipment with the claim. In this way, heritage built throughout history can be protected.

Financial stability

This is a very important point. After all, the company depends on financial stability to survive in the market. And insurance can be a critical part of keeping bills in order in case of claims.

As we said, claims happen unpredictably. As such, they can occur just as your business is going through a slightly more critical financial period. That is, failing to produce and still having to bear unexpected costs at this time, can fail the organization.

When relying on business insurance, it doesn't matter how financially your business is when the claim occurs. The bailout will cover immediate damage and even help resume activities in no time.

Predictability

When an accident occurs, such as a fire, for example, it is often difficult to determine the total size of the injury and the time required to resume activities. All of this will depend on the extent of the damage done and the company's ability to regenerate.

In this way, business insurance helps scale business recovery time based on the amount to be redeemed. With this, the business owner can determine how many days he will stop producing, better scaling the values for financial losses. With this predictability, he can take more appropriate actions to resume activities and cover the damage caused.

Finally, hiring business insurance provides several benefits for an entrepreneur. However, it is important to note that the choice of insurer can directly influence this factor.