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Business Venture 2017: Types of Insurance a Small Business Must Have
The backbone of a country’s economy is the presence of small enterprises or small traders, however a large percentage of small business startups turn to be eventually a failure. But why is this experienced by small businesses? Well, there are factors affecting this low success rate among businesses. While you cannot mitigate all risks in your business or overcome every challenge, you can protect the future of your business through leveraging the right insurance policies. The different types of insurance applicable for small businesses include general liability insurance, property insurance, business owner’s policy, commercial auto insurance, workers compensation, trade credit insurance, professional liability insurance, directors and officers insurance, data breach insurance, homeowner’s insurance, renter’s insurance, business interruption insurance, credit life insurance and personal automobile insurance.
Now let’s talk about trade credit insurance. A major percentage of your working capital if you are engaged in a business that is selling goods and services basing on credit terms, is probably tied up with accounts receivable, so trade credit insurance can help protect these accounts from losses as a result of credit risks such as bankruptcy, protracted default and insolvency. The other terms used to refer to trade credit insurance include insolvency insurance, bad debt insurance, credit insurance, business credit insurance, debtor insurance, export insurance, or trade indemnity insurance, but all of these terms mean the same thing. Trade credit insurance is a risk management product and insurance policy being offered by private insurance companies, as well as government export credit agencies, which is a type of casualty and property insurance. The beauty and essence of the concept behind trade credit insurance is the freedom you have for your small business, focusing on the most important things that truly matter for the growth, development and success of your business. The nature of trade credit insurance policy enables business entrepreneurs to approve credit limits faster, get more working capital, customer experience is enhanced and assurance that your receivables are insured. Trade credit insurance plays a major role in facilitating international trade, wherein a business can protect themselves from non-payment of foreign buyers as a result of political unrest, currency issues, expropriation and other conflicts.
It is high time to protect your small business as early as possible, because it is your responsibility to assure everyone within your organization that everything is under control and are protected, being the business owner. Invest in a trusted, reliable and reputable insurance company, regardless of your chosen business insurance, and remember that it is only you who can make the final decision of what type of insurance that is really applicable for your business, because you’re the one who can determine your business needs and goals.
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