Business insurance often covers things like liability and Directors and Governance. These types of insurance provide general coverage for things like accidents that happen on-site, issues that arise during the course of business, and the stakeholders and decision-makers that drive the company vision and strategy. But there are additional insurance policies that don’t always get the same consideration and, depending on your size and need, it is worthwhile to explore these additional options. Here are two insurance approaches that aren’t ubiquitous to small businesses for consideration.
- Captive Insurance
Captive insurance is an insurance company that is owned by the insured. It is basically another method of risk financing and allows businesses the opportunity to try to leverage the vehicle to produce a profit as opposed to paying out premiums to a third-party insurance provider. A strong understanding of risk and actuarial science is critical to take this on, but captive consulting is an option for those who want to learn more and have support as they navigate its implementation. One must be able to cover the loss should a loss incur so a partnership with a larger partner for more significant losses may be in order to ensure all scenarios are covered.
- Keyman Insurance
Keyman insurance covers the leader of a company in the event of incapacitation or death. This is especially important if a business really rests upon its visionary leader without whom the company would have a difficult time staying afloat. Keyman insurance covers the potential loss of intellectual capital and visionary leadership that a key leader provides. Coronavirus is a perfect example of how unforeseen circumstances can topple a business and its leadership without warning.
Insurance is meant to cover risk and hardship such as that which is occurring now. The truth is that risk is always a factor, though. Now more than ever, it is important to make sure businesses have the appropriate insurance coverage they need.