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Switch on the TV for any length of time and it’s a fairly safe bet that you’ll see at least one advert for some form of insurance in the consumer sphere, like home insurance, car insurance or pet insurance.  Businesses, however, can need protection too and appropriate insurance can be one way of getting it.

Protecting people

When businesses employ staff, they have certain legal obligations they need to meet including, in some instances, providing relevant insurance, however, these legal obligations should be viewed as minimum limits, rather than maximum targets.  While businesses may wish to extend their insurance cover for all employees, it is particularly important to look at the people (employees and directors) who are most crucial to the company’s operations and see what steps can be taken to minimise the impact of the company losing them in any way, even if only temporarily.  Remember that notice periods apply to people changing jobs rather than to life events such as accident, illness or even death.  Key person insurance can go a long way to mitigating the impact of these events – provided there is the right level of cover.

Protecting tangible assets

It has to be said that protecting tangible assets starts with having an appropriate level of physical security in place.  So much has been written about data security these days (particularly in the context of GDPR and its stiff penalties) that it can be dangerously easy to get caught up in cybersecurity and forget about the basics of physical security.  Physical security is important for many reasons, not least of which being it may be a prerequisite for getting insurance for your tangible assets.

Protecting intangible assets

Other people’s data

Other people’s data essentially means the data other people give you in the course of their relationship with you.  You have a legal duty to protect this and there can be stiff legal penalties applied for non-compliance (GDPR does allow for prison sentences to be imposed).  Just as importantly, data breaches can lead to serious reputational damage.  One or the other could potentially be enough to place a company in serious trouble, if not out of business completely.  This means that although data security comes at a cost, that cost should arguably be viewed in the same light as the cost of appropriate insurance cover, which is essentially what it is.

Your data

Similar comments apply here.  Although GDPR only applies to your treatment of other people’s data rather than your own (although employers should be aware that collecting their employees’ data may well be covered under GDPR), there are still compelling reasons for protecting it.  It’s also worth noting that while key person insurance can help to minimise the impact of the loss of a key person, it is not the be-all-and-end-all of protecting against staff loss and, where possible, staff should be encouraged to record and share meaningful knowledge and resources (such as contacts) in an appropriate way.

Cash flow

Cash flow may not typically be thought of as an intangible asset but in practical terms, the ability to keep a company running from one day to the next effectively depends on its ability to meet its financial obligations and that means managing cash flow.  In fact you could argue that cash flow is so important it’s invaluable and that therefore companies should do everything they can to protect it.  Purchasing assets outright can take a large chunk out of a company’s budget and so, even when funds are available for an outright purchase, it may actually be better to look at financing options.  It’s also worth asking the question of whether or not the company actually needs to own the asset or whether it simply needs to have access to it since, in the latter case, renting or leasing may be a more appropriate option.  This, again, is an area, in which companies may benefit from professional advice.

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