Assets are your possessions that make life easy for you; they are parts of your life. Assets can range from material to non-material. I want to adopt another view as to what constitute an asset.
My view is that assets do not necessarily mean things with financial values alone like cars, houses, business premises, machines etc. I believe what constitute an asset depends on an individual. This means things that assist such a person in earning a living e.g. a footballer’s asset could be his leg while a singer’s greatest asset could be his or her voice. As a bread winner your asset could be your lucrative job, your business, your house, your taxi etc. It will interest you to know that all these assets can and have been insured.
We are going to observe some risks that assets are exposed to and how one can protect his or her assets from them. As an individual or business it is important to protect your asset and that with appropriate insurance policies.
We are going to consider:
- Protecting your Asset as an individual
- Protecting your assets as a business or corporate body
1. FIRE, FLOODING, LANDSLIDE, HURRICANE AND OTHER NATURAL DISASTERS
These risks usually have devastating effects on assets. Fire can cause a lot of damage on buildings, cars and other physical assets so also can the other perils. Every person or business faces all the above listed risks. An insurance policy will not prevent them from occurring but it will be there for you when it does happen so that you will not end up losing everything you own to them. If your house gets burnt without an insurance policy you have lost all!
INSURANCE PROTECTION: These risks can be covered under Fire and Special Perils Insurance Policy. I am going to spare you the technical jargons. This policy covers loss or damage of properties against fire, lightning, explosion of boilers or gas, storm, flood, burst pipes and overflowing of water tanks, impact of vehicles, malicious damage, earthquake damage, aircraft damage, bush fire, tornado and cyclone as well as riot and strike. This insurance coverage is very cheap when you have to consider the premium payable vis-à-vis the value of the property. For example, if your house costs N10m and insuring it, you were charged a rate of 0.225%. This will make the annual premium you are going to pay to be N22,500. With that little amount you are covered under a fire and special perils for a year until renewal.
ALSO READ: How to choose a life insurance plan
2. THEFT, BURGLARY AND HOUSEBREAKING
Every home or business is faced with the challenge of being robbed. Depending on the area of residence houses get burgled and robbed occasionally. Armed robbers, thieves, vandals etc are threats to houses or apartments.
INSURANCE PROTECTION: What you can do to protect your priced assets like your home and properties is Burglary and Housebreaking Insurance. This policy covers your property against loss or damage by theft. It should be noted that the policy covers not only the stolen goods but also the damage inflicted on doors or safe by the burglar in an attempt to gain entrance to the property. It should be noted here that the insurance definition of Theft is different from its legal definition. In Insurance, theft must involve violence and application of force i.e. entry into or exit from a premises by forcible and violent means. This definition excludes stealing by tricks or any means other than the use of some form of force. However, your private residence burglary policy can cover such theft that does not include force (this is called larceny), which is covered at an additional premium. Burglary insurance too is not expensive. For example if all the content in your house or apartment is valued at N5m then depending on the area you reside the insurer might charge you 0.5% rate which makes your premium be N25,000. Kindly note that the rate is applied only to content of the building because it is not possible for a building to be stolen!
3. LITIGATION DUE TO LIABILITY TO OTHERS
Any lawsuit launches an assault to an individual’s financial assets. For example a guest in your house got injured as a result of using any amenity in your house or due to fittings or ceiling fan falling on him or her. If that person sues you, the court will rule in his favour. This is because in law, you owe every third party a duty of care whether they are guests in your house or not.
INSURANCE PROTECTION: What can I do to guide against this type of lawsuit. Very simple, get a public liability insurance to protect yourself – in this case get a personal liability policy. This policy protects you against legal liabilities that you may incur in your private capacity from third parties for death, injury, illness or property damage arising from your fault or negligence. All the expenses of the litigation are paid by the insurer.
There are lots of other risk that insurances cover to protect your assets e.g. accidents, other liabilities, job loss, negligence etc. In my concluding post of this part 1, I am going to address the remaining risks and how to protect them with insurance. Please keep reading and if you have any insurance questions leave your comments below.
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