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We’re all familiar with the basic concept behind insurance. Insurance is "contingency money" to provide financing in case the unexpected happens — like an illness, car crash, or house fire — to help us get through the difficult time.
But the type of insurance coverage you can get goes far beyond what you’d ordinarily expect it to do. While your primary reason for purchasing insurance may be to provide a backstop for those events that are most likely to happen — like workplace injuries or medical bills — the right insurance policy can be far more comprehensive than you might think, especially for business purposes.
You’ll be surprised by what else your insurance is (and can) protect you from!
Keeping Your Key Personnel Safe: Ransom Insurance
It's true! While kidnapping and being held for ransom is not the most common business occurrence, that doesn't mean it doesn't happen. Every year, between 12,000-25,000 kidnappings happen worldwide, and those are just the kidnappings that are reported. Just last year, kidnappers snatched American businessman William Sean Creighton Kopko off the street in Costa Rica while he was leaving work. The kidnappers allegedly demanded $950K in bitcoin in exchange for his release.
It’s scary to think about, but this situation can happen to anyone at any time. Have important trade secrets? Know someone with a grudge? Own an incredibly profitable company? You, or another important person in your company, could be next. Luckily, with the right business insurance, you can have provisions in place if someone from your company, or even you, are kidnapped and then a ransom is demanded for his or her safe return.
Ransom Insurance protects both the company and the kidnapped individual against the financial losses that stem from kidnapping, extortion, and ransom demands. Ransom Insurance can cover not only the affected employee, but also spouses, children, nannies, and more. The insurance will cover the ransom payment itself, as well as loss of income, public relations expenses, medical care, and psychiatric care. So next time you, or an employee, travels globally for business, remember Ransom Insurance.
Making Sure Your Rogue Product Doesn’t Bankrupt the Company: Product Recalls
Product recalls are probably one of the top nightmare scenarios for every company. A significant product recall could cost your company upwards of $12 million dollars.
When it becomes clear to both a business and the general public that a product you're selling may be unsafe, the most responsible thing a company can do in this situation is to make a public announcement about the product, make sure the media is also aware, and then put in motion the procedures needed for a product recall. It is extremely dangerous to a business's reputation, especially in the age of social media, to be repeatedly told that a product is potentially harmful, ignore those warnings, and sell the product anyway. In the 21st century, that is a recipe for a class action lawsuit.
Of course, product recalls are neither easy nor cheap to execute. However, with the right provisions in an insurance policy, the financial burdens of this exhaustive procedure can be offset. Ultimately, both from a legal and public relations standpoint, taking responsibility for a product recall will safeguard your company so that it can keep moving forward.
Getting Through Loss: Key Employee Insurance
While life insurance provides a contingency for families who have lost a member making critical financial contributions, that doesn't apply to businesses. However, there are specific forms of business insurance that can help to alleviate some of the costs when a valued staff member, such as a key researcher or partner, unexpectedly passes away. That insurance is known as Key Employee Insurance. In the way that a family's financial situation can be dramatically affected by the death of a key member, the same is true for a company. Insurance can mitigate the impact on a company’s finances as it struggles to fill the void.
Protecting Our Environment: Insurance for Environmental Harm
Some accidents can hurt people, but others can have a very dramatic and negative impact on the environment. Releasing deadly gases or toxins into water sources, or even contaminating the soil with waste material, renders our precious resources unsafe and unusable. Companies whose actions harm the environment, when found out, will ultimately be held responsible. When this happens, even if it was an accident, the company should still put forth efforts to make amends for what happened, rather than allow the environmental harm to go unchecked. Insurance coverage in these instances can help with the quarantine, containment, or recovery efforts that may be necessary in their aftermath.
Insurance can be incredibly helpful in protecting business assets and finances because you are budgeting adequately for much-needed actions to be taken while allowing the company to move forward.
What Else Can Be Covered?
If you're not sure what your current business insurance covers, or you are thinking it's time to get more insurance coverage, then Leap | Carpenter | Kemps Insurance Agency can help. Contact one of our agents with your questions and concerns, and we can go over your current policy or even help with moving onto a new one.