The topic of insurances for SMEs business owners in Singapore, Hong Kong or China always bring mitigate interest.
It is viewed by many as an unnecessary expense (or at least for the time being), or by those that believe it is important more as a peace of mind than a necessity. However, it is important to consider it as a necessary investment than just an ancillary cost.
Insurance will not only bring security for running your day to day business, it also gives your prospective clients confidence to work with you. Insurance is a tool allowing smaller companies to compete with larger companies: it will secure your clients by giving your company the financial strength needed if something goes wrong.
Indeed, for a large company, one of the barriers of doing business with start-ups or small companies is the insecurity: what if they fail to deliver? What if the product has a hidden default? For a large company, knowing that its business partner has the financial strength to manage incident is a must, and insurance will deliver that. Insurance companies can indeed issue windfall for an amount far higher than your actual business size, allowing your company and your prospective clients to get similar financial security than a larger competitor.
We have seen many cases where a start up company was able to work with multi-national companies, because they were able to secure, though an insurance policy, enough guarantees for a multi-national company to feel secured.
Whether you sell a service or a product, covering the liability that can be engaged in the process is a must for growing your business and deal with larger clients. It is even more relevant in the tech industry to build trust for all parties involved.