So you’re a small business owner, and you are required to carry insurance. Or you’re thinking of opening a small business, and while you’re ecstatic about running your actual company, you’re feeling your eyes glaze over when it comes to the thought that your business is going to need insurance. It can feel like a dreaded task, an unpleasant reality of the world we live in, and it’s sometimes easy to lose sight of why insurance exists and why it makes sense for you to carry it.
To reframe our understanding of the why of insurance, let’s go back in time to the days before insurance was a normal part of life and how it came into being.
The story of insurance is the story of people mitigating risk. Throughout human history, people have traditionally been at the mercy of accidents, unfortunate circumstances, and painful difficulties.
More than a hundred years ago, people concluded that, while it might not be possible to always prevent the actual bad event from occurring, it might be possible to prevent the damage.
- The father of a family dies in an accident, leaving his widow and seven children without a livelihood. Social conditions prevent women from acquiring good jobs, and the family is sunk into poverty for the next 10-15 years, until the older sons can start bringing in an income.
- A business gets vandalized and robbed, and while the police eventually apprehend the crooks, the goods are never recovered and the business owner is forced to start over from scratch.
- An unforeseen health problem results in a year of hospitalization, causing the devastating combination of lost wages and owed doctor bills.
People who were tired of these unfortunate circumstances looked for a way to mitigate these risks. The thing about risk is that it’s unforeseen and unforeseeable. These devastating life events just don’t happen to everyone. They’re possible, but not definite. Some people live their whole lives on earth without so much as a broken bone. So how do you come up with a plan that enables people to weather the unpredictable blows of life?
What most people can’t do is make complete preparations for every conceivable risk, just in case it happens. This would mean having savings in readiness to replace your car at any given time in case you have an accident, while also having another savings account to completely replace your business if it was destroyed, while simultaneously saving other money to provide for your whole family if something should happen to you.
Obviously, only the fabulously wealthy have those kind of resources, which doesn’t help the rest of us.
And this is where insurance was born. Insurance allows the little guy to pay a premium that is much smaller than the total cost of a life-altering accident or difficulty in exchange for the right to tap into the insurance company’s resources, if that awful circumstance ever does take place. After all, nothing might ever happen. But if it does, there won’t be quite the same devastating results to a business’s or family’s destiny.
Don’t look at your business insurance with a groan–look at it with relief that you live in the 21st century, where such things are not only available to you, but normal and easy to obtain. Give us a call today and we’ll make it easy for you to make sure your business is covered.