Business insurance is an essential tool for building wealth and protecting the assets of a company. In today’s unpredictable business environment, it is crucial to have a safety net in place to protect against unexpected events that could otherwise lead to financial loss and bankruptcy. In this article, we will explore how business insurance can help build wealth and provide peace of mind for business owners. Over the last seven years, following the sudden loss of my father, I have become more educated on the necessities and opportunities with insurance. Since he didn’t have any that we know of, there were no assets and no wealth to leave behind. In his honor, I vowed to not make the same mistake and to educate others on financial health and the stable investment into insurance.
I was surprised to find that many people are more consistent with their auto insurance payment than their life insurance premiums. Why? Simply a focus on other priorities and lack of education is my guess. So I decided to focus somewhere in the middle and help other entrepreneurs and small business owners protect their assets (i.e. property, equipment, themselves, etc) so that all of the sacrifices they’re making today are not in vain tomorrow should something unexpected happen.
This is where we begin to see opportunities to build wealth.
First, let’s take a look at the role of business insurance in protecting against risk. Risk is an inevitable part of doing business, but with proper insurance coverage, the financial impact of these risks can be mitigated. For example, a company that experiences a fire or natural disaster could be faced with significant financial losses if they are not insured. Business insurance can cover these losses and provide financial stability during a time of crisis.
Another way in which business insurance can help build wealth is by providing liability protection. Liability insurance can protect a business from lawsuits and other legal actions brought against it. This protection is especially important for companies that deal with customers or clients, as it can help mitigate the financial impact of lawsuits and other legal actions.
In addition to risk protection and liability coverage, business insurance can also provide access to a range of benefits that can help companies grow and thrive. For example, some insurance policies offer coverage for lost income, which can help businesses keep their doors open during difficult times. Business insurance can also provide coverage for employee benefits, such as health insurance and retirement plans, which can attract and retain high-quality employees.
Research supports the importance of business insurance in building wealth. A study by the National Association of Insurance Commissioners found that companies with insurance coverage were less likely to experience financial difficulties than those without insurance (NAIC, 2016). Another study by the Insurance Information Institute found that small businesses that invested in insurance had a higher success rate and were more likely to survive long-term than those without insurance (III, 2018).
In conclusion, business insurance is a valuable tool for building wealth and protecting the assets of a company. It provides protection against risk, liability, and access to a range of benefits that can help companies grow and thrive. By investing in business insurance, business owners can have peace of mind and feel confident in their ability to weather any storm that may come their way.
Photo by Med Badr Chemmaoui on Unsplash
References:
NAIC (National Association of Insurance Commissioners). (2016). The Role of Insurance in the Economy. Retrieved from https://www.naic.org/prod_serv/economic_research_role_of_insurance.htm
III (Insurance Information Institute). (2018). The Benefits of Business Insurance. Retrieved from https://www.iii.org/article/the-benefits-of-business-insurance