Something can always happen in a company. But with the right insurance, Cash position is not at risk.
Unforeseeable events are among the biggest opponents of Cash position . These can be a wide variety of things in a company, such as the failure of an important production facility, a fire in a plant or a supplier who can no longer meet its delivery obligations. The good news is that with professional risk and crisis management, Cash position is not at risk. The key to this is, above all, taking out the right insurance.
What insurances are there for entrepreneurs?
Companies have a wide choice of insurance policies to protect themselves against damage. As a rule, it is not possible to make a general recommendation as to which insurances are absolutely necessary for one's own company.
This is because every business operates according to different rules and this also makes it necessary to manage the respective risk individually. To assess risk, it is important first to evaluate the probability of damage occurring and then to estimate the resulting damage amounts as accurately as possible.
In general, however, there are six different types of insurance that every entrepreneur should consider in order to protect themselves against the relevant risks and thus safeguard Cash position :
- Legal expenses insurance
- Content insurance
- Machinery or electronics insurance
- Public liability insurance
- Professional liability insurance
- Business interruption insurance
Legal expenses insurance: protection against high legal costs
Every year, around half a million cases end up before the labor court in Germany. This figure alone shows the urgency and importance of appropriate legal protection insurance for companies.
Insurance helps minimize the financial risks of legal disputes. After all, being in the right does not necessarily mean being proven right in court. Without the right insurance, a long lawsuit can be very expensive and, for many, threaten the existence of the company.
In most cases, legal protection insurance offers not only financial benefits, but also corresponding personnel support. Trained personnel are available for all legal questions and in the event of legal problems in the company and provide support in asserting interests in court as well.
Contents insurance: To cover business and office equipment.
Contents insurance is often referred to in practice as property insurance. The purpose of this insurance is to cover any damage that occurs to the business or office equipment.
The scenarios for this are extremely varied. For example, contents insurance pays for the damage if burglars steal expensive IT equipment and damage the furnishings. Even if you forget to close the windows in the evening and a nighttime thunderstorm causes damage to the office premises, the contents insurance will take effect.
Since more and more companies are relying on home offices, it is important that the insurance also covers damage that does not occur directly at the business premises, but at the respective workplace of the employees. This is the case, for example, with the content insurance from Hiscox.
Machinery or electronics insurance: Additional protection to contents insurance
In many companies, contents insurance is absolutely sufficient. In addition, it is important to read the policy carefully so that it is clear which damages are actually covered. If it is an all-risk insurance policy, the technical equipment is also covered in addition to the commercial equipment.
If this is not the case, machinery or electronics insurance can provide additional protection. This takes effect, for example, if expensive work equipment is damaged by an operating error or overvoltage. In addition, the loss caused by the failure of the respective machines is also cushioned. Most contracts even cover sabotage of the equipment.
Public liability insurance: Just as important in professional life as in private life
With a business liability insurance, entrepreneurs can protect themselves against property damage and personal injury. In other words, whenever a third party suffers damage as a result of an event in one's own company, the insurance, which is often referred to simply as public liability, takes effect.
This could be, for example, water damage that affects the office below and is caused by the carelessness of an employee. Or a visitor to your trade show booth who slips on a banana peel and tears a ligament.
Public liability insurance also covers so-called "non-genuine" financial losses. This is the case, for example, if the customer's laptop is accidentally knocked off the table during a customer meeting and the hard drive is damaged. In this case, the insurance covers the costs of data recovery.
The "non-genuine" pecuniary loss includes, among other things, the rescue of data from a hard disk.
Professional liability insurance: Important for consulting firms
Professional liability insurance is required by law in some industries to protect entrepreneurs from high claims for damages. This is particularly the case where consulting and treatment errors can cause major damage. Examples include doctors, architects or engineers.
However, it is also advisable to take out professional liability insurance for many occupational groups in which it is not legally required. Anyone who advises their clients or prepares expert reports for them can cause financial loss in the process. The insurance covers such damages that occur during the performance of the activity. In this case, the insurance will cover the corresponding claims for damages.
In some cases, the insurance policies also cover damages in the event of DSGVO violations by customers that have arisen due to incorrect advice provided by the company itself. Here, too, it is important to read the fine print carefully and to pay attention to what coverage of damages the respective policy actually contains.
Business interruption insurance: To compensate for loss of income
When starting a business, few entrepreneurs probably think about the possibility of an interruption in current operations due to an unforeseen event.
Many entrepreneurs have become aware of the importance of such insurance, especially as a result of the Corona pandemic. Even if the resulting losses are not covered in practice by all existing insurance policies.
But there are numerous other scenarios in which business interruption insurance takes effect. For example, if the company is paralyzed for some time by a hacker attack and customers are then no longer able to order goods from the online store. Or if the business has to be closed by order of the authorities.
In most cases, business interruption insurance can be modularly adapted to the needs of your own company. Among other things, it is also possible for the insurance to pay employees' salaries during the outage. This means that Cash position is not put at risk even in the event of longer outages.
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