Insurance and Risk Management for Small Business Owners

Many small business owners truly believe that when they have a proper and comprehensive insurance program for their business, they will be fully protected from financial losses. Setting aside the grey areas on the fine print of most insurance policies, there are many losses that insurance cannot be extended.

Some of the such losses that small business suffered after occurrence of accident; are lost of goodwill to customers due to failure to deliver merchandises on time; lost of faith from employees for not providing a conducive working environment, and many more losses which do not have financial impact initially but gradually translate into financially losses.

While insurance is important in indemnifying small business owners in case of fire damaging their properties and/or accidents that causing injuries and loss of life thus downtime in productivity, small business owners should practice risk management in order to create a more sustainable business and have a competitive edge over their competitors to minimize their lost time hence cost.

The basic methods of risk management are

1.Avoidance of Risk

Simple procedures and things that most small business owners took for granted can have huge impact when they resulted in accident. Always practice the maxim of prevention is better than cure.

2.Reduction of risk and losses

Be aware of the consequences of risk and accident, develop a loss prevention or reduction system to minimize the occurrence of risk and losses when risk happened.

3.Transferring of Risk

Transfer the risk to other parties like insurance company.

4.Keeping of risk and absorption of losses.

If transfer of risk is not possible, you may have to absorb some of the risk and/or losses. Some of the insurance policies require the insured to bear a portion of the losses term as deductible or excess.

Arranging a comprehensive insurance cover for small business is crucial for the survival, many small businesses have overlooked or ignored the important of a proper coverage for their business, when accident happens, they found themselves in a financial distress and thus loosing their customers to their competitors.

It is thus advisable to seek professional advice for a proper insurance coverage and more importantly practice good risk management.

Boat Insurance

One of the supreme delights that a person can obtain is by possessing his own boat. It takes us to the past when adventure on the high seas was a real experience and man was the complete ruler of his dominion as a commander of his ship.

At present there are few places where a common man can be master and leader of his own fate, but a boat is one of them. But possessing a boat is not without peril or cost. Boat insurance is necessary for shielding such an expensive asset.

The two chief aspects of boat insurance are legal responsibility, or security and insurance; and property loss. In some respects, they are managed the same way as automobile or home policies.

When an individual insures his boat for liability, it guards an individual against harm to another person's assets brought about by the boat. It also has provisions for lawful protection, in case one is charged for something that is protected under the boat insurance.

However, there are certain delicate differences from an automobile policy when it comes to loss and damage insurance. The characteristic coverage for loss is either "actual cash value" (ACV), or "agreed upon" value.

Boat insurance, which is agreed upon for worth, has a money amount printed in the policy, which is the sum, compensated for complete loss. Limited damages are restored at "for new" prices, implying that there is no reduction imposed, apart from high wear matter like sails, and some machinery. This is the extra-costly alternative to cover a boat.

An authentic cash value policy indicates that if a boat is a complete loss, one will obtain the existing market price, not including the deductible, and suitable reduction for the age and state of the boat during loss.