May 15, 2010

How Much To Insure Your I-Café Investment

We will now discuss how much should you insure your investment on your i-café business. It is very important that you get an insurance cover with the right amount in it because, as advised by the experts, you should not under-insure nor over-insure your business because doing so will not give you any advantage should the time to claim against your coverage arise. The established procedures on insurance claims are such that the amount that the insured would get passes through series of adjustments which in the end would result to something fair to both the insurer and the insured. What then should be the amounts of cover for the various risks that you would get for your i-café?

Using the three (3) business risks that we discussed in the previous post, the following are the recommended amounts of insurance cover that you must have in your policy:
  • Premises/Operations Liability Insurance - This will indemnify you for bodily injury, including death, and property damage to third parties (your customers) in connection with your business operations. For this cover, the recommended amount is PhP50,000/person for Bodily Injury (BI), PhP100,000/accident for Property Damage (PD) and PhP100,000 aggregate limit for BI and PD. By the way, this cover is the same as the Public Liability Insurance which some local government units require businesses in their areas to obligatorily have.
  • Fire and Lightning (F/L) Insurance with Broad Water Damage (BWD) Provision - The figure you must use in purchasing this insurance cover are the following:
1) Amount you spent in the construction (if you own the building) or the cost of improvements you made on the space you are renting
2) Amount you spent for the PC equipment and accessories, the cost of your local area network (LAN), and the money you spent for the furniture and fixtures (tables and chairs included) and others like air-conditioning units, electric fans, etc..
  • Robbery and Burglary (R&B) Insurance - The amount of cover that you should get  for this insurance must include all your expenses in buying the PC equipment and accessories which can be hauled by robbers and burglars.
Make sure to keep your proof of purchase (sales invoices and official receipts) in a place other than your shop. These are the documents where your insurer will base the amount that you will get in cases of claims on losses due to fire and allied perils (lightning, earthquake, etc.) or robbery and burglary.

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