Entrepreneurship is always risky. First of all, with financial ones. A number of external and internal factors influence business processes. The most significant include the political and economic situation in the country, fires, natural disasters, work with partners, customers and staff errors. To minimize losses from these unpleasant situations, business insurance was invented.
general information
Even the most experienced analysts cannot always predict the factors that can significantly affect business processes. To minimize losses from their mistakes, this financial instrument was developed. Business insurance is quite common in the countries of the conditional west. In this area, there are three main areas:
- Production downtime insurance.
- Responsibility.
- Property.
These types of business insurance exist. Let's look at them in more detail.
Downtime Insurance
In many manufacturing companies, the process takes twenty-four hours and seven days a week. From such an ongoing activity of the organization depends on its financial well-being. In such cases, the staff usually works in shift mode. But alas, there are risks. No one is safe from a fire in a workshop or office, a power outage, suspension of activities by government agencies, litigation, or other similar risks. Moreover, the subject of the contract in this case is precisely the simple one that arose due to reasons that do not depend on the company.
The insurer undertakes to compensate for the damage that arose during such a break in activity. The most commonly used franchise model. It is unconditional. What is their difference? Let's look at a conditional franchise. Suppose a downtime is recognized as such only if it lasts more than three days. In this case, if the company does not work less than days, then it will not receive anything. But if the break lasted four days, then all of them will be paid. In the case of the unconditional, a minimum period of absence of activity is established, which is not considered when calculating the payment. That is, if it is set at three days, then downtime will be compensated only starting from the fourth.
Liability Insurance
What is meant in this case? This type of business insurance provides that in the event of the event stipulated by the contract, compensation for the damage caused will not be paid by the person who caused it, but by the company to which the risks were transferred. An example is the situation with hazardous industries. So, if an emergency occurs, such as an explosion, and people suffer, then the compensation will not be paid by the employer, but by the insurance company.
This also includes the environmental aspect of the activity, and the transportation of products / valuable material values. In case of damage or other negative incident, monetary compensation will be paid. This is very important in cases where it is necessary to ensure the stable operation of the company and it is very undesirable that situations arise when it will be necessary to lay out a significant amount of money.
Property insurance
This is the simplest and most common case of risk avoidance. In such cases, they try to minimize property risks associated with explosions, fires, flooding, terrorist attacks, natural disasters and other dangers. The tariff rate in this case, as a rule, does not exceed a percentage.It all depends on the nature of the property, geographical location, political situation.
The most popular objects are production facilities, offices, warehouses, equipment, transport and more. If we talk about global practice, the approach of compulsory insurance of civil liability of vehicles is quite popular. Indeed, if several cars are destroyed in an accident, then the car owner may not have enough money to compensate for everything. In this case, insurance companies assume all risks. And business owners can be calm and not worry about possible losses.
Features of the activity
Insurance and business valuation provide for complete information about the state of affairs and real value. Otherwise, a situation may arise where compensation will not be made. It is necessary to objectively assess the existing risks, as well as their size.
Business insurance in Russia is now a fairly developed area - about seven dozen companies work in it. They offer detailed consultations and different terms of interaction. True, it should be noted that within the Russian Federation, the geographical factor has a great influence.
In addition, the practice of using information from other sources is quite popular. So, a person or company can be checked for open cases or decisions made in the court register, on the customer bases of various banks and credit organizations.
We say a word about medium and small business
The support of the state is a significant number of small companies that provide employment and maintain stability within the country. According to experts, in the Russian Federation insurance of small business, as well as medium, is a barely plowed wide field. It has been underway for quite some time, but there is no need to talk about the formed market yet. There are several reasons for this. The most important thing is that their owners do not understand why they need a business insurance program and what benefits it provides.
But about the negative moments when money is not paid or their receipt is associated with a significant waste of money, many have heard. What to do in this case? First of all, it is necessary to take care of the honesty of the work of insurers. And gradually improve confidence in them in an entrepreneurial environment.
Conclusion
Risk insurance is an area of activity that allows you to look more confidently into the future. Of course, if you look at the average temperature in the room, the money spent will most likely never come back. But in the event of an unforeseen situation, compensation provides considerable assistance in terms of keeping the company afloat.
It should be noted that insurance is not the only way to minimize possible risks. So, as an alternative, you can still consider creating a reserve fund of the enterprise or investing in several points or even other companies. Although in such cases it is necessary to work hard, choosing a place for investing money, or to fight the temptation to spend it, if access to it is very easy.