Owning a Business: 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. It is understood that it is impossible to overcome every challenge and mitigate all risks in a business, but it is possible to protect the future of your business through leveraging the right insurance policies. The various types of business insurance and business owners can consider are workers compensation, trade credit insurance, professional liability insurance, general liability insurance, property insurance, business owner’s policy, commercial auto insurance, directors and officers insurance, data breach insurance, homeowner’s insurance, renter’s insurance, business interruption insurance, credit life insurance and personal automobile insurance.
Let us discuss in detail, 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. Trade credit insurance are also called business credit insurance, debtor insurance, export insurance, insolvency insurance, bad debt insurance, credit insurance or trade indemnity insurance, but all of these terms mean the same thing. Trade credit insurance is a type of insurance product and at the same time a risk management product that is offered by private insurance companies, and government export credit agencies, also considered as 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. 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 has a major impact 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 business disruptions and 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 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 applicable for your business.