My Name is Mohamed Zegge. Founder & Director of Fahari Yetu Group and Insurance professional.
Today I will take you through Insurance in relation to Business. I hope most of member in this platform are businessman and businesswoman. Our Topic is Role of Insurance in Business
Areas to be covered:
1. Definition of Insurance.
2. Definition of risk.
3. Who business owner handle risk.
4. Insurance Interest.
5. Comercail Combined Insurance - CCI (Business Insurance)
6. Cover provided by CCI.
7. Why business needs Insurance.
By simple definition:-
Insurance is a legal contract that transfers risk from one part known as policy holder or client to an insurance provider (Insurance company/Insurer). Or we may say is a means of transferring risk from a client to Insurance company whereby Insurance Company promise to pay loss as a result of insured peril in exchange of premium (amount payable as a price)
In every Insurance contract there must be a specified risk to be covered.
What is Risk?
There are several definitions of risk. One can define risk as a probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.
In Finance risk is the probability that an actual return on an investment will be lower than the expected return and results into loss Or risk is the possibility of financial loss.
In everything we do, we are facing different types of risks. Risk is inevitable but we can control them. A risk is what makes you decide whether or not you need insurance. And what coverage. Nature of Insurance contract is a take it or leave it contract. Since one part is willing to take risks on behalf of another part Though there is tailor-made Insurance policy. Specifically for a particular company or person basing on nature and/or need of the same.
How Business Owner Handle Risk?
Not all business owners prefer insurance as a means of controlling risk. Normally there are three types of handling risk.
i. Avoidance – Here is when a business owner chooses not to participate in an activity because of the risk involved. E.g. not to transport goods during night or not to hire a driver above 55years. This is not recommendable means of controlling risk, since you can’t avoid all risks.
ii. Retention – a business owner decides to save money in case of unexpected event E.g. opening a fixed deposit account in case of car accident or fire.
iii. Transfer - This is very common and modern way of handling risk. Risk is transferred to an insurance Company and an insurance company promises to pay its client the amount of loss suffered as a result of an insured peril. A client is not allowed to make profit from the Insurance. The aim of Insurance is to put a client in a same position as he/she was before an insured peril caused loss (financial loss).
To make things clear its illegal for a client to make profit out of Insurance.
Insurable Risks–
It is important to know that not every risk is insurable. For a risk to be insurable must have the following features:
i. The event insured must be accidental or unforeseen.
ii. There must be an insurable interest. A person must have a legal possession of the subject matter which proves that there is possibility of having financial loss.
iii. Risks must not be against public policy or law *e.g.* risk of incurring fine for criminal offense is not insurable.
Commercial combined Insurance or Business Combined Insurance
This is a tailor made policy. Not standard policy. As I said earlier, two parties come into an agreement on specific perils to be covered. Normally it include more than one Insurance cover in one policy. Commercial combined insurance is a package policy which can be tailored to specific needs of many business types. Even companies operating in the same sector are likely to have different business models, processes, machinery, staff numbers etc., meaning their commercial combined policies will need to reflect their individual requirements. As such commercial combined insurance is the go-to policy for warehouses, wholesalers, manufacturers, workshops, factories, importers, exporters and distributors, and more.
For example a soft drink company in Dar may exclude eathequake risk in its cover but a company of same operations in Kigoma may include earthquake risk due to nature of the environment.
Why business needs Insurance?
Does Insurance add value in a business? Is it luxury to have an Insurance? Most of business owners think having insurance to protect his business is a waste of money. But in reality insurance is one of the best and cheapest means of controlling risks facing a business.
There are few reasons to think of insurance if you are businessman.
i. It makes you look credible: - It shows your prospective clients and customers that you’re a safe. If anything goes wrong with the product or work you do for them, you have a way to compensate. It builds trust.
ii. Protects Your Employees:- Your most valuable asset is not the products or services you offer, the equipment you take so much care to maintain or even the brand you struggled for years to build. No, your most valuable asset is your employees, and it pays to protect them in the event of an accident. The law requires that you carry workers’ comp/ employer to take responsibility incase employee get illness or injury in course of work. Good employer should also consider offering disability coverage, even if you have to charge your employees for a portion of the cost. By the way, protecting your employees’ interests is also a good way to protect yours — against lawsuits or liability claims.
iii. Helps to Attract and Retain Employees: Having insurance isn’t just about protecting your business in “doom and gloom” scenarios. It can have the positive benefit of attracting and retaining qualified employees. Second to salary, job seekers look for benefits packages that include life, health, disability and long-term care insurance. If you don’t offer these, you may lose a good employee to a company that does.
iv. Legal Expenses:- We live in a litigious society. In the event of a lawsuit or liability claim, without insurance, your business could fold. One accident. One broken contract. One disgruntled employee, and it’s over. Even if you win the suit, you could go out of business due to the cost of legal defense. Rather than worry about what could happen, liability insurance can give you peace of mind, enabling you to concentrate on what truly matters — running a successful business.
v. You Cannot Predict the Future:- No business owner has a crystal ball hidden in a closet that can predict what might happen in the future. It would be excellent if natural disasters, injuries on the job or lawsuits never occurred, but no one can guarantee that such things won’t occur. For that reason alone, it’s best to be insured.
There are few covers which are very vital to any Business.
1. Fire & allied Perils Insurance.
2. Group Personal Accident (for employees)
3. Employers Liability.
4. Plant & Machinery Breakdown.
5. Professional Indemnity (covered risks associated with a particular profession - Doctors, Engineer, Financial Advisors etc)
6. Health Insurance.
7. Motor Insurance (company vehicles)
CONCLUSION
With the proper business insurance, business owners can achieve peace of mind and focus their attention on what they do best, operating a productive, profitable and personally rewarding business for years to come.
I advise all business owners in this platform to have an Insurance for their business.
In case you need Insurance Services kindly contact me +255786-203-863
Thank you.
For more information about our activities kindly ask
positiveconsultationtz@gmail.com
Www.poc.or.tz
Think positive live better
Today I will take you through Insurance in relation to Business. I hope most of member in this platform are businessman and businesswoman. Our Topic is Role of Insurance in Business
Areas to be covered:
1. Definition of Insurance.
2. Definition of risk.
3. Who business owner handle risk.
4. Insurance Interest.
5. Comercail Combined Insurance - CCI (Business Insurance)
6. Cover provided by CCI.
7. Why business needs Insurance.
By simple definition:-
Insurance is a legal contract that transfers risk from one part known as policy holder or client to an insurance provider (Insurance company/Insurer). Or we may say is a means of transferring risk from a client to Insurance company whereby Insurance Company promise to pay loss as a result of insured peril in exchange of premium (amount payable as a price)
In every Insurance contract there must be a specified risk to be covered.
What is Risk?
There are several definitions of risk. One can define risk as a probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action.
In Finance risk is the probability that an actual return on an investment will be lower than the expected return and results into loss Or risk is the possibility of financial loss.
In everything we do, we are facing different types of risks. Risk is inevitable but we can control them. A risk is what makes you decide whether or not you need insurance. And what coverage. Nature of Insurance contract is a take it or leave it contract. Since one part is willing to take risks on behalf of another part Though there is tailor-made Insurance policy. Specifically for a particular company or person basing on nature and/or need of the same.
How Business Owner Handle Risk?
Not all business owners prefer insurance as a means of controlling risk. Normally there are three types of handling risk.
i. Avoidance – Here is when a business owner chooses not to participate in an activity because of the risk involved. E.g. not to transport goods during night or not to hire a driver above 55years. This is not recommendable means of controlling risk, since you can’t avoid all risks.
ii. Retention – a business owner decides to save money in case of unexpected event E.g. opening a fixed deposit account in case of car accident or fire.
iii. Transfer - This is very common and modern way of handling risk. Risk is transferred to an insurance Company and an insurance company promises to pay its client the amount of loss suffered as a result of an insured peril. A client is not allowed to make profit from the Insurance. The aim of Insurance is to put a client in a same position as he/she was before an insured peril caused loss (financial loss).
To make things clear its illegal for a client to make profit out of Insurance.
Insurable Risks–
It is important to know that not every risk is insurable. For a risk to be insurable must have the following features:
i. The event insured must be accidental or unforeseen.
ii. There must be an insurable interest. A person must have a legal possession of the subject matter which proves that there is possibility of having financial loss.
iii. Risks must not be against public policy or law *e.g.* risk of incurring fine for criminal offense is not insurable.
Commercial combined Insurance or Business Combined Insurance
This is a tailor made policy. Not standard policy. As I said earlier, two parties come into an agreement on specific perils to be covered. Normally it include more than one Insurance cover in one policy. Commercial combined insurance is a package policy which can be tailored to specific needs of many business types. Even companies operating in the same sector are likely to have different business models, processes, machinery, staff numbers etc., meaning their commercial combined policies will need to reflect their individual requirements. As such commercial combined insurance is the go-to policy for warehouses, wholesalers, manufacturers, workshops, factories, importers, exporters and distributors, and more.
For example a soft drink company in Dar may exclude eathequake risk in its cover but a company of same operations in Kigoma may include earthquake risk due to nature of the environment.
Why business needs Insurance?
Does Insurance add value in a business? Is it luxury to have an Insurance? Most of business owners think having insurance to protect his business is a waste of money. But in reality insurance is one of the best and cheapest means of controlling risks facing a business.
There are few reasons to think of insurance if you are businessman.
i. It makes you look credible: - It shows your prospective clients and customers that you’re a safe. If anything goes wrong with the product or work you do for them, you have a way to compensate. It builds trust.
ii. Protects Your Employees:- Your most valuable asset is not the products or services you offer, the equipment you take so much care to maintain or even the brand you struggled for years to build. No, your most valuable asset is your employees, and it pays to protect them in the event of an accident. The law requires that you carry workers’ comp/ employer to take responsibility incase employee get illness or injury in course of work. Good employer should also consider offering disability coverage, even if you have to charge your employees for a portion of the cost. By the way, protecting your employees’ interests is also a good way to protect yours — against lawsuits or liability claims.
iii. Helps to Attract and Retain Employees: Having insurance isn’t just about protecting your business in “doom and gloom” scenarios. It can have the positive benefit of attracting and retaining qualified employees. Second to salary, job seekers look for benefits packages that include life, health, disability and long-term care insurance. If you don’t offer these, you may lose a good employee to a company that does.
iv. Legal Expenses:- We live in a litigious society. In the event of a lawsuit or liability claim, without insurance, your business could fold. One accident. One broken contract. One disgruntled employee, and it’s over. Even if you win the suit, you could go out of business due to the cost of legal defense. Rather than worry about what could happen, liability insurance can give you peace of mind, enabling you to concentrate on what truly matters — running a successful business.
v. You Cannot Predict the Future:- No business owner has a crystal ball hidden in a closet that can predict what might happen in the future. It would be excellent if natural disasters, injuries on the job or lawsuits never occurred, but no one can guarantee that such things won’t occur. For that reason alone, it’s best to be insured.
There are few covers which are very vital to any Business.
1. Fire & allied Perils Insurance.
2. Group Personal Accident (for employees)
3. Employers Liability.
4. Plant & Machinery Breakdown.
5. Professional Indemnity (covered risks associated with a particular profession - Doctors, Engineer, Financial Advisors etc)
6. Health Insurance.
7. Motor Insurance (company vehicles)
CONCLUSION
With the proper business insurance, business owners can achieve peace of mind and focus their attention on what they do best, operating a productive, profitable and personally rewarding business for years to come.
I advise all business owners in this platform to have an Insurance for their business.
In case you need Insurance Services kindly contact me +255786-203-863
Thank you.
For more information about our activities kindly ask
positiveconsultationtz@gmail.com
Www.poc.or.tz
Think positive live better
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