When you’re starting a business insurance isn’t always a priority. In fact, many business owners with large corporations express that they started to consider insurance for their businesses way too late in the game.

It’s fair to say that, in many cases, having business insurance can make or break your business, especially if you operate a small business.

General manager at JMMB Insurance Broker Sheron Gilzean told the Jamaica Observer that many small business owners in Jamaica do not have insurance for their business.

She said, in her experience, “Many of them will tell you that they’ll take the risk.”

But she noted that the risk is getting more burdensome than it was in the past.

“We’re now Americanised, where everybody is suing and they’re going for policy limit, as much as $25 million, and the courts are making those big awards,” she warned.

This is why she’s encouraging small business owners to get some form of insurance. She noted that it doesn’t have to be costly, pointing out that there are options.

Globally, it is recommended that the first policy business owners need – and also the least expensive one – is general liability insurance.

“You can start as low as $75,000 plus GCT so you have different options, and you have up to half a million dollars [in coverage]. You have a lot of persons who have premium financing at the bank, or other premium finance companies, who would assist in having the monthly payments or if you’re taking out a loan you could add on the insurance,” she stated. “You’re not only getting one set of insurance, you’re getting insurance that covers the building, your content, stock, your employers liability, public liability, burglary, accidents, machine breakdown, etc.”

“It all depends on the type of small business that you have. Is it a small business where you’re gonna have stocks? You need to look at what would hinder you, if there’s a disaster, from moving forward,” Gilzean advised.

She emphasised that business insurance is not mandatory and is not a requirement of starting a business. But she stressed that it is important for the success of the business.

“For starting a business, the only way they will enforce that you have insurance is if you’re getting a loan, because the bank is going to want to protect their asset, which is the loan that they are giving you,” she said.

She shared that you can also use your life insurance as collateral.

“You can protect your small business using a key man insurance as well, so if you’re the sole proprietor and you’re getting a loan, in case there’s debt, then you have a life insurance policy to cover whatever loan you would have taken out. That is something that the bank or the lending institution will determine.”

In the meantime, she said it doesn’t matter how small the business is, there’s some sort of insurance you will need.

Currently the entrepreneurs who seek out business insurance policies are those who interact directly with customers, “it’s only those where they have customers coming in and they might want a public liability or they want to ensure that as employers they are covered in terms of the business they are doing”.

It’s estimated that 75 per cent of US businesses are underinsured, and 40 per cent of small business owners have no insurance at all. While there’s no data to indicate how many Jamaican businesses actually have insurance, Gilzean believes the figures are low and is encouraging business owners to be responsible and consider taking out a business insurance policy today.