Article provided by Marsh
We consider most things as binary – yes or no, win or lose. Insurance is not as black and white. The relevance of insurance has never been more evident, where we all win when appropriate cover is in place for precisely the risks we could potentially face in the future.
Insurance is acquired for two primary reasons:
- People are unable to personally carry the financial cost of risk should their assets become damaged, lost, or stolen.
- Some contracts, such as purchasing a vehicle or a home, require insurance cover before they can be concluded.
Insurance of any type is about managing risk, and risk goes hand-in-hand with owning assets, property and valuables. The ability to transfer this risk of loss to an insurer is the purpose of insurance.
But, what is the value of insurance to you as an individual and/or as a small business owner?
- It is sometimes difficult for clients to see the value of insurance, especially when they don’t have claims but are paying a monthly premium. The beauty of Insurance is having peace of mind that you are protected against potential risk. Imagine if your vehicle was written off in an accident, or if your home/business burnt to the ground – the financial cost of any of those scenario’s could far outweigh the cost of a years’ worth of insurance premium.
- Insurance allows you to reduce uncertainty and vulnerability by identifying potential risks and mitigating them through the appropriate coverage.
- Insurance provides you with the peace of mind that your business is able to remain financially secure even if you suffer losses to key assets or are unable to operate for a specific period, such as during a pandemic or natural disaster, where you may experience a reduction in your profit due to an interruption to the flow of your business. (damaged machinery for example where parts have to be sourced internationally)
- A lot of SME’s do not have high liquidity and insurance acts as the shock absorber in times of unfortunate incidents. The value of a good insurance policy is to put you back into the position you were in prior to the unfortunate incident.
Ultimately, insurance is a promise to be there when you need it most.
The challenge in gaining value from your insurance comes down to obtaining the right advice and the right cover, at the right price for you. Inappropriate advice being given at the time your policy begins, and speed over excellence, may result in having inappropriate cover in place – which in turn can lead to financial losses and unnecessary spend. It is therefore essential to rely on experienced insurers and brokers to tailor-make the cover you need.
At Marsh, we know what it takes to protect what is most important to you. Our experienced team of brokers will work with you to design an insurance programme that suits both your personal and business needs and budget.
Contact us now to speak to a Marsh Consultant