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The argument against business insurance

23 Dec

I know some folks who would rather “self-insure.” According to Michigan State University, “When you buy your own insurance on the open market, in effect, you are paying someone else (an insurance company) to take on the risk that they will pay out more in benefits than they collect from you in premiums. This is known as being ‘fully-insured’ or ‘fully-funded.’ Alternatively, if you decide to assume the risk yourself – i.e., to save your premium dollars and use them to pay your…bills on your own – you are considered ‘self-insured’ or ‘self-funded.’” MSU self-insures its medical plans. MSU has the resources to self-insure.

I also know some retail establishments that self-insure. Granted, they don’t have the resources of Michigan State University—they self-insure for another reason. They feel fully-funded insurance is cost-prohibitive. They would rather assume the risk themselves and put the money elsewhere than pay for additional insurance.

When I attended my first SMB Nation conference (SMB Nation is a company that helps educate small and medium businesses—SMBs—about business technology), one of the most popular presentations was a panel discussion on best practices. Five of the most respected names in my field were on a stage answering questions. Someone from the audience asked if anyone on the panel carried business insurance. Nobody raised a hand.

It’s a gamble. You should discuss your exposure and your willingness to pay for insurance with an insurance agent.

*****

Mark Anthony Germanos is the author of two books, Escape the Cubicle: How to leave your corporate or government job for something better and How to Make Computer Systems Work for You. He has faith in a slow but sure Sacramento business revival. Sacramento small business owners are leading the way. His second book, Escape the Cubicle, is for those who want to escape cubicle jobs and become successfully self-employed. Escape the Cubicle answers the questions: "How can I grow my business" and "How do I become my own boss."

Mark is the President of Cameron Park Computer Services. As a business owner and computer networking consultant, he has seen habits that successful Sacramento small business owners embrace. He helps Sacramento small business owners embrace those habits to increase their profits, efficiency and happiness. An advocate of Sacramento business revival, Mark believes everybody should run their lives like a small business, perform SWOT Analyses and use social media campaigns to improve business. He used to say “social media is stupid.” That was until he attended a conference and saw how Sacramento small business owners can use social media campaigns as a valuable tool. Since then, he has earned more than $40,000 in business via social media. His Sacramento small business clients also have five-figure returns. Sacramento small business owners that launch social media campaigns give themselves a comparative advantage over those who lag behind. Mark does not do everything, but his clients do receive great results and participate in the Sacramento business revival when they follow his advice.

Mark moved from Chicago and restarted his business in California with a cell phone and a Honda Civic. An active triathlete, he has a life, a dream wife and a dog. For additional details, visit http://markanthonygermanos.com. Twitter: http://twitter.com/markgermanos. Facebook: http://facebook.com/markanthonygermanos. LinkedIn: http://www.linkedin.com/in/markgermanos.

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