Insurance is a way to protect one’s self from financial loss. In managing finances; whether personal or business, we always think about increasing income, reducing cost, and hedging risks. Insurance falls in the last category.

Before we get started, let’s explain a few insurance jargon.

Premium is the amount you pay to an insurance company to gain access to their coverage policy.

The act of God is an event that is natural and cannot be prevented or predicted.

A deductible is an amount to cover when there is an insured loss before your insurance provider can cover the rest.

Peril is the cause of loss.

Indemnity is the amount you receive when there is a loss on insured property.

Now that we know a few jargons, let’s bust some myths about Insurance!

Myths about Insurance

Insurance is a waste of money

Life is unpredictable. Regardless of how much we plan and protect, bad events just pop up here and there. Having insurance coverage ensures that we do not have to run helter-skelter to recover.

Insurance is expensive

This is not true. It is quite cheap, and the premiums are typically less than 5% of the total amount you can claim.

Insurance is for the rich

People who can’t afford a huge chunk of money on demand, need insurance the most. This myth couldn’t be farther from the truth.

Insurance companies never pay

Insurance companies pay all the time. Like any other business, they do need to check to ensure that claims are not fraudulent. Once that is certain, they pay!

If you have insurance in your business; you get peace of mind, quickly bounce back from losses and enjoy stability and protection. It’s also just the right thing to do!

Types Of Insurance

Different kinds of businesses need different kinds of insurance covers. Understanding insurance helps you manage risks. You also know claims to make if there is a loss or damage when interacting with a third party. There is roughly 20 insurance that protects the business and its owners. The best person to speak to is a credible insurance broker but we have written about a few types of insurance here.

Property insurance – This protects your inventory, furniture, and equipment from damages done by fire, theft, or storm. It applies whether you own or rent your space.

Worker’s compensation insurance covers medical treatment, disability, and death benefits for employees while carrying out business duties. 

Business interruption insurance covers a business owner in case of an interruption of regular work due to catastrophes or accidents.

Professional liability insurance claims can arise due to failure to perform a duty or from irreversible mistakes that lead to damage. A business or organization can cover this type of claim under Professional Liability Insurance or Errors and Omission (E&O) Insurance.

Product liability insurance – Manufactures are open to lawsuits against the owner or company for damages caused by one of their products. It can happen even if every measure is taken to ensure the safety of the product. PLI covers such claims and costs incurred by faulty products.

Commercial auto insurance covers company vehicles. Insuring vehicles can cover third-party injuries, goods for delivery, and damages to the vehicle.

General liability insurance provides the defense and covers damages with third parties if a product, employee, or service caused some harm or injury.

Loan repayment insurance ensures the repayment of credit. If the borrower dies, becomes ill or disabled, loses a job, or faces other circumstances that may prevent income.

Business credit insurance protects against loss from uncleared invoices caused by protracted default, insolvency, or bankruptcy of the buyer.

Join Pennee’s Telegram Mogul group HERE and ask questions if you need help figuring out what insurance is best for you.