Limitations of the Start-ups Insurance

Friday, January 11, 2013

Limitations of the Start-ups Insurance

Every year more and more small businesses start up across the world and this trend seems to be increasing. More and more people want to fulfil a lifelong dream of working for themselves and the idea of making their own business a success is top of a lot of people’s lists of things to do. Whilst some small start-up businesses do thrive and quickly become successful this isn’t always the case. 

Often a hidden cost or unexpected expense can cripple a young company before it gets the chance to flourish. Many new business owners are so caught up in the day to day running of their new company that they forget to sort out some very important basic needs. Insurance is one of the most important factors that a new start-up firm must consider, as if anything unforeseen should happen then without insurance cover it could spell the end of a company when it is still in its infancy.

When you start a new company, many things can go wrong that may not be directly your fault. Your property could get flooded or vandalized or one of your employees may become ill and require time off. You might need time off because of illness or the worst case scenario of a fatal accident or illness could end it all. Many new businesses will start out with a financial debt and it is important that this debt be secured through insurance so that the company can grow confidently. 

Office equipment can be expensive to buy when first starting out and it is important that it has insurance to cover it. If a new laptop gets stolen or broken this can be a cost that a new business simply can’t afford. Equally company vehicles must be considered as any damage to these will not only have a cost involved in repairing but also the vehicle will be out of action for some time which will also cost the company.

The death of a partner or business owner can have a devastating effect on any new company. If the company has more debt than assets then this debt could be handed down to the surviving partner or a family member. Therefore it is essential that these debts have adequate cover to keep everybody who is concerned safe.
A new business must be seen to be a safe prospect for everybody involved in its success. That means that employees must be confident that a business is on the right track or they may let their enthusiasm drop. 

Suppliers may reduce credit limits or withdraw them completely if they think a company is having financial difficulties and even customers might decide that giving their loyalty to a company that may not be around too long is a bad idea. Competitors will target any business that they feel may be struggling and try to close in on their areas. By having adequate insurance a new business is safe against all of these potential problems.

Start-ups insurance (it’s interesting fact that the Danish term is forsikring til opstart af virksomhed) is very important and should never be neglected; however it is important that the cover is tailor made to suit what the start-up company requires. Talk to experts and get advice on exactly what your company needs insuring against as not all potential pitfalls are obvious.

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