A good entrepreneur saves on everything, except security
A good entrepreneur saves on everything, except security. The beginning of any business is one of the most difficult stages. Clients are few, work is scarce, expenses are high, turnover is low and the investment loan must be repaid.
Therefore, one of the main missions of new entrepreneurs is to save on expenses. This is what José, who was taking his first steps as a contractor, intended to do. After some time without getting a good job, suddenly, two clients came up who wanted to reform their respective properties. He said yes to both of them and promised to finish the renovations in three weeks.
The problem was that one house was 20 miles from the other, but José did not want to hire more staff. What he did was set up a very strict schedule for staff to move between the two properties when the job called for it.
Unfortunately, last Thursday, the van carrying several workers from one house to another overturned on the highway. Two employees were hospitalized. After the enormous scare, José called the insurer to make the corresponding claim and they explained to him that private insurance did not cover accidents if the vehicle is used for commercial purposes. José tried to argue that his truck “was only transporting his employees.” To which the insurance agent replied that precisely “that is considered a commercial activity.”
“You, as a contractor, were required to purchase a commercial insurance policy on your vehicle. This covers the people who circulate in it, the driver, the tools and materials that this transport. We are very sorry to inform you that your personal policy does not cover this accident.”
Now José has a big problem before him. He is responsible for the workers’ medical bill. He will have to bear the cost of repairing or replacing his truck, take out commercial insurance and hire other staff if he wants to complete the work on both properties. Most likely, when he finishes these two jobs, his debts will be higher.
The first saving measure for any entrepreneur should be to mitigate the potential risks that his company faces. To do this, he must talk to an insurance specialist he trusts to help him determine the most convenient policy to protect the business. A good entrepreneur saves on everything, except security.