Insurance has been in existence for long and has been practiced in different forms. Choosing the right policy or cover is primarily dependent on the profession or trade that you operate in.

Although many business owners feel business insurance is an expense they cannot afford or is a luxury for more established businesses, it is an expense every business regardless of the industry, size or length of time in existence needs to include in its budget.

How much insurance to carry will depend on your industry, the business structure and the amount of assets the business has. There are various covers a business can undertake but the insurance cover should be undertaken after a thorough audit of the business.

Public liability insurance will provide cover in the event of a member of the public being injured or having their property damaged while at your premises. For example if a customer gets injured on your business premises or your product has a defect that injures a customer and you do not have insurance this could spell the end of your business.

Business liability insurance covers accidents that occur on your business premises, product defects and mishaps that occur during normal business operations on and off business.

Business insurance protects a business from closing due a catastrophic loss. Fires, floods, and storms are the inevitable ones. When a company carries insurance against these types of losses, closure and loss is temporary instead of permanent.

Companies should always consider business interruption cover on their businesses to ensure continued cash flow for the duration of a closure due to a disaster.

Business can access loans by presenting insurances of their property businesses this is mortgage therefore insurance facilitates businesses to access finance for further investments.

Not only does insurance benefit the insured and the insurer in business, it also benefits the long term investment in the economy. Insurerss invest the premium income they receive making them among the largest institutional investors.

For life insurance, the companies in particular the products they write are long term in nature and therefore long term investment are made and held to maturity.

This steady flow of long term capital provided to the financial institutions or market by insurance industry is crucial for financial system as a whole as it reduces shortages and thus contributes considerably to the stability of the economy.

While there is a direct economic effect through the financial protection of assets, there is also an additional consequence that that goes with it, that is peace of mind.

People tend to behave differently and more positively when they know that certain risks are taken care of. This is psychological rather than financial effect accompanying the purchase of insurance.

Apart from policies, insurance companies have got other services like information provider, knowledge carrier and training centres for economies with highly complex products that need a lot of financial and non financial knowledge.

A fire insurer needs to know about building codes and building materials, a flood insurer about geographical features and weather conditions a health insurer about medicine and pharmacy, etc.

The building of this knowledge base has a positive impact and has significant value for the development of economies and societies.

Insurance if one of rare mechanisms that allow spreading of risk over time. This spreading over time can involve long periods and works from one generation to the next.

There are other few industries that have such long time horizon as the insurance industry.Insurance is important to the insurer, the insured and the society as a whole.

Though there are many benefits of insurance, it is unfortunate that some people consider it as a superior good which becomes regularly and widely available after other needs are covered, which is a wrong perception.

The writer is an accountant based in Kigali