In the face of increasing risks, insurance is the most important protection measure

Insurance does not protect against disasters, but when they occur, insurance is a strong, and sometimes fatal, support for business continuity. The importance of insurance is growing along with uncertainty, changes in markets and increasingly frequent natural disasters, which are gaining dizzying momentum. The question of whether to insure is replaced by another, more relevant one: what exactly and for what amount to insure in order to ensure sufficient protection for the business in the event of a critical disaster?

Why is it important to take care of company property insurance?

In recent years, natural disasters such as floods, storms, and fires have become more frequent and intense around the world, and damage to company assets can require significant financial resources. Investing in the right insurance can be a decisive factor in the survival of a company. In order to provide high-quality protection for your business from shocks, we recommend that you insure both your company's assets and the risk of business interruption. Business interruption insurance compensates for a portion of your lost income and covers fixed costs: wages, loans, and other additional expenses to mitigate business interruption losses when your company's operations are disrupted after damage or destruction of your assets.

In 2024, 88 fires broke out in production and industrial buildings in Lithuania.

One of the fires completely destroyed about 5,000 sq. meters of production premises, which contained production equipment and inventories. The remaining part of the factory premises was partially damaged, i.e. the building structures, production equipment, inventories (raw materials, work in progress, inventories of goods, etc.) were exposed to high temperatures, smoked, and were doused with water during extinguishing. The losses were compensated under building insurance, production equipment, inventories, and business interruption insurance contracts. The total fire loss is about 7.1 million EUR (without franchise). Our specialists adjusted the damage to the client in stages over 10 months.

It is important to regularly review the terms of your insurance

One of the biggest mistakes businesses make is not paying enough attention to insurance policies after they are concluded. Often, companies' activities change, expand, and new risks arise, but the insurance conditions remain the same. It is important to constantly and responsibly review the available conditions and insurance amounts, as this may result in insufficient insurance coverage or insufficient compensation in the event of an accident. Given today's context, it is important to assess whether the amount of movable and immovable property specified in the insurance contract corresponds to the real costs of construction and property repair or restoration that could potentially arise.

 

A comprehensive approach and the role of an insurance broker

Insurance should not be viewed as separate products, but as comprehensive protection against potential risks. A comprehensive approach ensures that all areas of business activity are properly protected. This is where an insurance broker can become an indispensable partner. A broker delves into the specifics of a particular company's activities, analyzes potential risks, and offers the most optimal insurance solutions. He also helps review existing contracts and ensure that they meet the latest market trends and business needs.

According to data from the Bank of Lithuania, in the first half of 2024, the Lithuanian insurance market in terms of written premiums amounted to EUR 790.6 million, and benefits amounted to EUR 432.2 million, which is 10.9% and 11.4% more, respectively, than in the same period in 2023. General trends show that the amounts of insurance benefits are increasing, reflecting the growing diversity and frequency of risks.

We always try to advise our clients on how to avoid critical events. However, if they do occur, our goal and commitment is to help settle the insured loss as quickly and efficiently as possible.

To effectively protect your business from critical disasters, we recommend insuring both the company’s assets and the risk of business interruption.