Selasa, 11 September 2012

Importance of Property Insurance for Small and Medium Sized Businesses

Properties (physical assets) make up for the most part of the capital of a business. Any damage caused to these assets can incur huge losses to a business. Especially for small businesses, damage to these costly physical assets may prove detrimental for the survival of the business. Let us discuss in this article the importance of property insurance for small businesses.

SMEs need to secure their investment 
Small and medium sized businesses are usually limited by their budgets, and any kind of unexpected risks to their capital can cease the working of their business. Hence, their huge investments in properties, contents and equipment have to be protected from the risks by taking proper insurance. This will not only relieve the business owner from financial burden, but also helps the business to resume quickly.

Protects businesses from catastrophic losses 
Catastrophes such as typhoons, gales, lightning, flash floods, and earthquakes can cause massive damage to the property of SMEs. The contents are also hit. Catastrophes are unpredictable. They cause immense damage to these businesses, making it difficult to recuperate from such loss. Therefore, it is important for them to purchase the insurance.

Protects monetary value of the property 
Property insurance is beneficial as it covers the damages and repairs because of natural causes such as catastrophes and man-made causes such as vandalism, theft, fire and so on. Such troubles cause significant decline in the value of the property. Also, the property owner would have to repair the breakage and other damage thus, caused to the property. Property insurance will help the policy holder to get the right price to the property, should he want to sell it, thus, keeping the value of the property intact.

Covers loss from theft 
This insurance protects businesses against theft by covering the content including inventory, fixtures, equipment like computers, electric appliances, etc., by employee or others.

Protects business content/stock 
For SMEs, content in the business house or stock of goods are significant for their everyday operations. It is, as such, important to purchase property insurance that covers the damage to content and the stock.

Covers loss of income due to business interruption 
Apart from covering the losses of catastrophes and damages because of vandalism, arson, theft, it also protects SMEs from loss of business by providing income when it is void as a consequence of repairs. Not all property insurance policies offer coverage for business interruption, it is, therefore, important for you to check if a particular company includes business interruption in its policy or not.

Having understood the significance of property insurance, SMEs should consider purchasing it. While doing so, it would be sensible for them to research thoroughly by diverse media including, word of mouth, friends and relatives, and the Internet. The Internet presents numerous brokerage agencies with substantial expertise, which also suggest you the right cover after doing proper risk assessment for your company.

As SMEs are prone to financial sickness due to any damage to the property, and badly need protection against any kind of threats to thrive competitively, purchasing the property insurance would protect them against the vulnerabilities.