There are many people who are increasingly becoming interested in starting small scale industries such as small factories. This can be attributed to issues such as increasing demand for products, which many people see as an opportunity to make some quick money. When you are in a position where you are thinking of doing the same, there are a few things that you often need to do before you actually start the business.
The first of these is making sure that you have all the prerequisites needed for running a business. One that most people ignore is getting the right kind of insurance for the business. Though most people think that this is optional, the fact of the matter is that it can go a long way in making sure that the business can be run stress free. When you have insurance for your business, it basically means that you will not need to worry in case of any calamity that befalls it since you will be covered. When getting such a product, there are a few questions you need to ask yourself including:
- What kinds of risks are you primarily exposed to?
If you are to get the best insurance for your factory, you will need to know what you are insuring it against. You only need to figure out the kinds of operations that are going to take place on the factory floor in order to understand what kind of insurance to get. For instance, if the process of manufacturing mostly involves the use of flammable chemicals, you will need to ensure that any insurance product you subscribe to can specifically cover fires. This way, you can be sure that in case of such an event, it will be easy for you to file a claim with them.
- How much can you afford to pay?
Insurance is an expense, which means that the more you pay for it the less your profits will be. When getting insurance for a manufacturing plant, you need to find ways of keeping the cost of getting the insurance down. Some of these include negotiating with the insurance agent as well as shopping around to find the cheapest product for your needs. This is a labor intensive process but which often bears fruit especially if done right.
- What are your legal obligations as far as insurance is concerned?
There are some countries and legal jurisdictions that will require you to take out some form of insurance when you run particular types of manufacturing plants. To ensure that you conform to such laws, you need to be conversant with all the legal issues that you need to fulfil when starting the kind of plant you want to start. This is information that can be found easily online for most countries. If you are unable to do this, you only need to visit a government office in your locality and then ask them for guidance as far as this is concerned. Doing this will help you avoid any legal issues related to insurance in future, something that might cost you a lot.
- What is your business’ worth?
When you get insurance, it’s important to try and ensure that it’s just enough to help you start over in case something goes wrong. The only way this can be done is by first knowing how much value the business is. For instance, when you run a manufacturing plant, it’s a good idea to find out how much the equipment in it costs. This makes it easier figure out just how much insurance you will need. The beauty of this is that it will help you avoid spending too much on insurance that is excessive in comparison to how much you are covering, or too little to help you start over in case of a calamity.
- What process do you need to go through when filing a claim?
The main point of getting insurance for a facility such as a manufacturing plant is to give you the ability to get back on your feet in case it suffers from issues such as fires. When you are out shopping for the insurance, you should always try to end up with one that makes the process of filing a claim as simple as possible. This way, there will be no delays during those times when you really need the money.
As long as you follow the above, it will be easy for you to end up with insurance that will be very good value for money in the long run.
Jay is a business advisor who specializes in small and large scale manufacturing plant management. Over the past ten years, he has provided valuable advice for people who need information on a wide range of issues. These include theoretical ones such as management tips as well as practical ones such as how to find the best deburring applications.