Came across this old article that I wrote for Entrepreneur Magazine. Great editing by Maricris Carlos.
Buying peace of mind
You may never actually use it, but that is the beauty of buying insurance.
By Jennee Grace Rubrico | 
For many business owners, buying insurance is an afterthought. Who can blame them? The benefits of buying insurance may not always be as obvious as in more tangible purchases—say, raw materials or inventory. Getting business insurance tends to feel a little less pressing, as buyers hope they never use it.
Yet, business insurance can be just as important to an enterprise as any other consideration. In a country like the Philippines, where unpredictable natural and man-made calamities happen all too frequently, insuring one’s business from risks could be the best thing for entrepreneurs to do: If or when disaster strikes, they will not have to worry about business-related expenses that are covered by insurance.
“Insurance is an excellent risk management tool, especially for catastrophes or calamitous events which are difficult to program for or plan ahead for. Insurance mitigates risk by transferring particular risks or exposures to an insurer in consideration of a payment or premium,” said Nico Lacson, chief operating officer of Lacson & Lacson Insurance Brokers Inc. “Aside from protecting your assets, you also protect your income statement by converting an unknown risk or exposure into a fixed or predictable expense,” he added.
Hence, getting an insurance policy cannot really be compared with buying off-the-shelf products, said Scott Judy, AIG’s head of distribution. “With an insurance policy, you are buying a promise—a promise to pay in the event of a future claim,” he said. That promise, Lacson added, is kept only when a claim is made and settled.
Business insurance typically provides risk cover over a 1-year period, but some insurance companies provide flexibility based on the operations of the business. AIG, for instance, has 45 different products only for business insurance. “Policies can also be contract specific, which would typically mean longer term policies to match the contract duration,” said Judy.
