Corporate Insurance: An Integral Part of Business Risk Mitigation

Nobody plans for their business to fail, but as they say, failing to plan is planning to fail. If you want to run a successful business, the first and foremost thing that you need to do is to plan. A good business plan is one that does not only strategize ways to grow but also takes into account the potential risks that may come in the way of growth. This is where insurance comes into play.

Insurance protects your business from losses that can hinder growth. Nothing in life is free of risk, it is only that some risks are small and others are not. Some risks, you can manage on your own and others call for support. The purpose of corporate insurance is to give you the support for the risk that you cannot manage on your own.

Do I Still Need to Worry About Risk Mitigation if I Have Insurance?

Having insurance doesn’t mean you are covered for every possible risk. There are a number of different risks for which insurance companies offer different types of insurances. Therefore, it is very important to consider what each type of insurance means, what risk it will cover, and to what extent. If you have not bought any insurance to cover the risk posed by natural disasters, it will be only you responsible for any less in case of such an event.

Another important thing to remember when relying on insurance for risk mitigation is the terms and conditions that the insurance policy contains. Insurance companies use these terms and conditions to protect themselves from fraudulent insurance claims. For example, if your property is prone to water damage and you have bought insurance for it, the insurance company might set in place some rules and regulations regarding preventive measures that you must take in order to keep your property safe from water damage. If water damage occurs despite those measures, you will be eligible for insurance coverage, however, if the insurer finds that you have let the damage happen purposely to claim the insurance money, it will not be liable to cover the damage. Moreover, a fraudulent insurance complaint is a crime punishable by law.

What Are Deductibles and How Do They Affect the Premium?

There are some losses that you can easily cover for yourself. This is called self-insurance and the amount for which you are self-insured is called a deductible. The greater the deductibles, the lesser the insurance premium that you will have to pay.

Deciding how much you want to rely on external insurance and to which extent you want to increase or decrease your deductibles depends on the size of your business, your own ability to cover minor losses, and a cost-benefit analysis of whether or not you should be paying an increased premium for a risk that is not likely to occur or for a loss that you can easily cover yourself.

How Can I Know What to Get Insured For?

As discussed at the beginning of the article, deciding which type of insurance you should get is an important part of the business plan. The type of insurances that will be useful to you can vary from industry to industry. This is so because each industry and each business setting has its own demands and risks. Industries like construction are more prone to risks like physical injuries to the employees, however, the same risk is minimal for a digital marketing agency.

It is best to sit with your insurance representative so that he can use his knowledge of the market and his expertise in the field to guide you about the type and amount of insurance you should get. In order to keep up with the market and to get the best out of your insurance policy, it is crucial to periodically arrange a meeting with your insurance representative and make sure that you are on the right track.

Are you interested in corporate insurance quotes from top insurance companies in Canada? We’d always recommend Insurance Direct Canada – one of the best insurance brokers in Canada.