Why is it important to have insurance for your business?

Insurance not only covers material damage, but can also ensure the continuity of operations in the event of an accident. This is for small businesses, which often do not have sufficient resources to face a crisis on their own, the Mexican Association of Insurance Institutions (AMIS) said in a statement.

“If a business must temporarily close due to a disaster, there are coverages that can cover the profits and expenses that remain after the incident, allowing the business to recover and operate again without further complications,” AMIS explains.

What benefits exist?

Indemnification is crucial for a business to be able to regain continuity of operations in a timely manner. By receiving the value of the insured sum, the business can quickly cover repair costs, replenish inventories, or even rent a new location if necessary.

Not having insurance can lead a company to face serious financial deviations. Without compensation, the owner would be forced to resort to higher loans or debts to cover unforeseen expenses, which increases the financial risk and could compromise the long-term viability of the business.

What type of property can you insure?

Before purchasing your policy, it is important to identify which assets are essential to your business and need protection. From the business premises, furniture, and equipment, to the merchandise and vehicles used in daily operations, all of these items represent a significant investment.

AMIS recommends taking a detailed inventory of assets that are critical to business continuity and prioritizing their protection.

How much do I want the insurance to cover?

Determining the appropriate amount of coverage is essential to ensure that insurance can respond effectively in the event of a loss.

Value assets based on the coverage purchased and the loss that business interruption could cause over a given period of time. Underestimating the amount of coverage can result in insufficient compensation, leaving the business with a financial gap that could be difficult to cover.

It is essential to find an appropriate Sum Insured, considering the current value of the assets and the specific needs of the business, so that the coverage is accurate and effective in case it needs to be activated.