James F. Mahoney, Attorney
Commentaries
 
     

April 2013

Why Do You Buy Insurance?

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Many insurance brokers believe there are only two motivations pushing clients to buy insurance: (1) it’s a requirement and (2) fear.

They are correct.

Moving the company from buying only the required insurance coverage to investing in the necessary insurance protection requires tapping into the second reason for buying insurance: fear. Don’t misunderstand: this use of the term “fear” does not constitute the knee-knocking, butterflies-in-your-stomach type of fear.

“Respect” may be a better term – respect for what could happen and the financial consequences of the undesired event. Understand that stepping out your door in the morning is a risk – as are all enterprising undertakings – but there are algorithms to evaluate the risk so you can make an informed decision, e.g., what are the underlying assumptions in thinking your fertilizer plant won't blow up and put you out of business?.