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The Fine Print of Insuring Your Business

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No matter how careful you are, there are always unforeseen perils that may cause damage or loss to your business or possessions. An accidental fire in your plant, the theft of your delivery vehicle or disability sustained in a work-related mishap can happen anytime.

Surprisingly, not a few entrepreneurs consider an insurance policy among the least of their business priorities. Erlinda Delos Reyes, president and general manager of PDB Insurance Agency, Inc., a company insuring small and medium enterprises (SMEs) for more than 20 years thinks it should be otherwise.

"The idea of self-insurance is never worth the gamble," she explained to B Line Magazine. "I'm not saying this because it's my business to sell insurance but the pool of funds necessary to safely insure losses is inordinately large for a small entrepreneur."

Based on experience as an insurance executive, she understands the difficulties that SMEs face. "Filipino entrepreneurs are not yet as conscious as their counterparts in developed countries when it comes to insuring their interests," Ms. Delos Reyes admits. "It ranks quite low on their scale of priorities."

Smart business owners though see the long view, she said. The insurance premiums charged for a business is certainly affordable compared with the loss of capital, equipment and even from litigation should fortune take a turn for the worse.

When looking for an insurer to work with, it is important to find out who the different professionals are out there and how it will affect your insurance purchase. Direct writers are employed by a specific company and may have specialty fields of insurance. Insurance brokers negotiate on behalf of a client in dealing with various insurers. Insurance agents, like PDBIA, deal on a wholesale basis with insurance firms and provide a variety of different coverage. Entrepreneurs are well advised to purchase policies through agents. Insurance agents who have gathered years of knowledge across many different areas of insurance are aware of the cost-effective coverage and are able to spare entrepreneurs the hassle of legwork and negotiation. As wholesale buyers, agents wield clout and influence with the insurance firms and can protect an entrepreneur from irregular practices.

Despite the proliferation of package policies, SMEs require insurance tailored to their need. As an entrepreneur, take the time to write down a clear statement of expectations from your insurance representative. To be able to provide your business with the best possible protection, your insurance provider must be given information about the business and its exposure to loss. Also, insurance should not be seen as a one-shot deal. As your business grows, so do insurance needs and potential liabilities. Under-insurance can be a major problem with expanding companies.

"Our duty is to be the professional helpers to the SMEs," Ms. Delos Reyes said. "We exist to protect our client's business and provide quality service in looking after their best interest."

PDB Insurance Agency, the insurance arm of Planters Development Bank, has been in the business since 1982 and provides competitive insurance coverage as well as technical and professional services to entrepreneurs. PDBIA currently uses the Integrated Insurance Brokerage System or IIBS, the automated facility enabling better response times and efficient delivery of services to clients.
Source: Business Line Vol. 1 No. 1 2003

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