Insurance Basics
In this Policy, the investment risk in the investment portfolio is borne by the policyholder.

Planning to set up an independent venture? Secure your funds from associated risks

Being into business always involves risks. Whether it is a start-up or an expansion or an established business, the risk is there. Here are seven ways to mitigate business risk in an efficient manner.

Keep reserve cash

Many businesses, especially ventures have a major risk of managing cash flow. The investor has to calculate the money needed to run the monthly operations and how long the money will last in case there are no receivables. A slowdown in accounts is not healthy either, so a calculation of total payments and outstanding amounts needs to be evaluated. Reserve cash and proper planning can help in avoiding the risk of low cash. If there is a cash crunch, then the business might have to be closed.

Indemnification Clause

There can be external forces which might cause great damage to the investor’s business. To avoid the same, indemnification is needed. For example, the business is into software distribution. The purchasing of the software is done from a vendor and it turns out that he/she is not authorized to do so and you also get sued by the rightful owner. In that case, indemnification can help in bail out.

Invest money in capital building products

Additionally, any businessman should not only safeguard the business by taking insurance he/she should also safeguard the future of the family. Investing in money making instruments like ULIPs can help the investor in securing the family and build capital for the future which can help at the time of emergencies. As ULIPs offer the dual benefit of insurance and capital building, it can benefit the investor in the long run. Say, if the business is facing a shortage of funds, then it can be managed by the profits made by an investor after investing in capital building products. These investments can serve as strong pillars during hardships and might change the situation completely.

Losses can happen anytime! The best way is to prepare for them. Take insurance to safeguard yourself and your budding business from any hardship. Check out HDFC Life Click 2 Wealth to know more.

ARN: ED/09/19/16026

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