3 Benefits of Insurance to MSMEs

Insurance is usually a good idea, both for individuals and for businesses.?Whether it is life, health, vehicle, property, professional indemnity, public liability, workers' compensation or business interruption insurance - to list a few types - insurance can provide key coverage in case of a disaster or emergency which you would otherwise have to fork out thousands of dollars for out-of-pocket.

In this article, we will be highlighting some benefits of insurance, particularly to business owners and managers.?We hope that this information causes you to pause and consider your biggest exposures to business risk, to see whether you may need to contact an insurance broker or company to discuss how your business can be further protected.

Benefit #1

A main benefit of insurance is the protection of assets and valuables - whether it is your home/office, your vehicles, other property, your staff or your health.?Having insurance over your valuables in effect helps you to spread any future potential costs over a longer time period (via periodic premiums), rather than being hit with one huge lumpsum in the event of an adverse condition or event.?Additionally, insurance can sometimes provide cash-back (or claim refunds), depending on the type of insurance, which may increase your liquidity at the time you receive these payments.

Benefit #2

Another unsung benefit of insurance is that it can increase the credibility and perceived value of your business.?I mean, why get insurance unless you think you have something valuable to protect - even if that something is your reputation??Having insurance can communicate to your customers, vendors and even potential investors that you value your business enough to protect it to some extent - and this can increase their confidence in doing business with you.

Benefit #3

The final benefit of insurance which we will recognize here is that it provides a source of investment or financing.?When tangible assets are insured, they can be used as collateral to obtain even higher levels of financing.?Also too, some insurance policies allow you to borrow against the cash value of those policies at interest rates which are usually lower than regular loans, and this can provide quick financing to you or your business if you are in a jam.?Insurance policies which do not recognize a payout in your lifetime (due to the insured asset outliving you) can be passed on or willed to other individuals.

Written by Dawn Williams, Managing Director of Resilia Accounting Services Inc. on July 26, 2022

To learn more about our services, visit www.resiliaaccounting.com