On a yearly basis, fire and other natural disasters such as flood, hit many markets in the country leaving many small business owners in a state of hopelessness and grief. In some instances, some of these business owners die out of shock because they have lost everything they have to unforeseen occurrence.
Many
findings have established that, in the markets where majority of small
businesses operate, fires for instance, are often caused mainly as a result of
power fluctuations, cooking with naked fire in the market and overloading of
electrical appliances among others.
Further
studies also have it that, less than one per cent of such small businesses are
insured although individually, a handful have personal life insurance policies.
Small businesses and insurance
Small
businesses face many risks and are better off insured than not. Not all small
businesses have the insurance they should and as a result, they are at risk.
These are a few reasons why insurance is important for small businesses.
Protect your investment
It takes a lot of funds to set up a
business no matter how small. Overtime, this business grows and as profits are
ploughed back, stock increases. In some instances, loans are taken to stock or
restock. These are investments that can be lost within a twinkle of an eye. It
could be through fire or any natural disaster. Once lost, the business could be
done and the evidence is there to recall through the many market fires and
floods that consume properties of small businesses in the country. The loss can
be recovered only if one insures the business to protect their investment. It’s
not easy paying money every month or yearly when one does not really see the
benefit. But that is why it’s called insurance. Seek advice and insure your
business today and protect your investment.
If
you are renting the space your business operates from, a landlord's insurance
policy might not cover you. Having insurance is beneficial in this situation in
case something happens.
Another
situation to consider is if you are borrowing money to finance because the loan
agreement you sign will likely ask for proof of a specific type of insurance.
Lastly,
some individual contracts that you have with clients may require insurance in
case something goes wrong. Note that, even as a small business, you may bid for
a contract from government or a reputable company that requires that you have
insurance. Do not lose that contract because you have not insured your
business.
Workers' compensation claim
Workplace accidents can happen any day
at any time. Without insurance, your small business (and frankly, you) are
going to be paying for that employee's workers' compensation out of your
pocket.
If
an employee gets a serious injury that doesn't allow them to work any longer,
workers' compensation will cover the medical bills and pay benefits for that
employee.
This
can reach into the hundreds of thousands of Ghana cedis quickly which can lead
to your financial ruin.
Natural disaster, vandalism, theft
Natural disasters are a common
occurrence and they are highly unpredictable. Particularly in the country
today, flooding has fast become the most common cause of loss of property.
Note
that if your business is not insured and a natural disaster occurs, your
business might be physically destroyed with no financial backup for repairs or
replacements.
Regardless
of what kind of natural disaster it might be, property insurance is what one
needs.
This is a very important type of
insurance for any business to have but especially for small businesses that
don't have the capital to completely replace things if they get suddenly
destroyed.
Another
benefit of having property insurance is that it covers vandalism, fire, as well
as theft.
Conclusion
Typically
for some businesses, it can be hard to see the value of buying something such
as insurance because it is intangible and is something that they don't always
use. It is not something that they will need all the time. However, it must be
noted that insurance is something that one will need when one needs it.
Source: Graphic.com.gh