The great Henry Ford said, “The best we can do is size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence.” He might have been describing insurance, which protects us and our interests, because life and business are inherently risky. Whether we are crossing the street or growing a company, insurance is our best answer to uncertainty. But how to decide which kind and how much to carry?
Insurance agents are experts at determining coverage needs, types and levels. Finding a knowledgeable and experienced agent who knows your circumstances is the best way to make sure you’re adequately insured. Expect coverage levels and costs to hinge on risk levels, actuarial data, your personal history, the value of what is being insured and how much the policy will pay out if invoked. In other words, policies are based on the riskiness of your endeavour, how often such endeavours typically fail, how you (or others, in the case of life insurance) performed with similar endeavours, how much your endeavour is worth, and how much money you require if the endeavour isn’t successful.
Insurance specialists advise setting up health, life, disability, property and vehicle policies to cover most of the catastrophic events that could confront an individual and his or her family. Additional insurance types are necessary to protect businesses. A “business owner’s policy” is often the most economical way to buy basic coverages like general liability, property, vehicle, fire and theft. Comprehensive business insurance, however, should also protect against “errors and omissions”: claims that your actions were inadequate, unprofessional or incomplete. Additionally, good coverage guards against product liability claims and business interruption. Finally, all businesses need workers’ compensation coverage regardless of workforce size and business type. These policies compensate employees who are injured on the job and protect employers from legal action stemming from injuries. Even seemingly low-risk work – operating a cash register, for instance – can result in expensive claims for work-related conditions like carpal tunnel syndrome.