• Friday, December 01, 2023
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The dangers of neglecting insurance


According to Ben Johnson, “Success produces confidence; confidence relaxes the industry, and negligence ruins the reputation which accuracy had raised.”

Negligence of any kind, irrespective of the field of human endeavour, is a serious issue that should be addressed adequately, not to talk of an area that tends to provide adequate protection for businesses and properties in case of any eventuality which insurance provides for.

It is an indisputable fact that insurance coverage is crucial for protecting individuals and businesses against any unforeseen event, such as fire incidents, theft, damages to goods, vehicular accidents, environmental hazards, and a whole lot more.

Failure to act proactively may result in serious financial issues or even lead to bankruptcy.

Neglecting insurance coverage may expose you to the following:
1. Financial Vulnerability: One of the greatest risks associated with skipping out on insurance is the increased level of financial vulnerability it exposes people and families to.

Due to the unpredictability of life, bad occurrences like accidents, sicknesses, and natural disasters can take place without notice.

Without insurance, the cost of such occurrences falls fully on the shoulders of the impacted parties, potentially creating extreme financial strain, debt buildup, and even bankruptcy.

2. Lack of Protection: Neglecting insurance results in inadequate protection for the insured and their loved ones. For instance, not having health insurance may lead to restricted access to high-quality healthcare, postponed medical procedures, or astronomical medical expenses.

Similar to not having auto insurance, those who do so may be held responsible for accident-related damages, medical bills, or legal fees. Without sufficient coverage, people are forced to shoulder the full weight of these financial pressures, which frequently has long-term effects.

3. Loss of Property and Assets: Insurance acts as a safety net against property loss, theft, or damage. For both homes and companies, skipping out on property insurance can have disastrous results.

Natural catastrophes, fires, and theft can seriously harm or destroy valuable assets, leaving people or corporations in financial ruin. The ability to recover and rebuild is made possible by insurance coverage, preventing a loss from having an everlasting negative impact.

4. Legal and Liability Risks: Insurance shields people from legal and liability risks in addition to protecting them from financial losses. Neglecting liability insurance can have serious repercussions, particularly for corporations.

In today’s litigious environment, one lawsuit might result in astronomical legal costs, settlements, or verdicts that can put a company out of business.

Due to the potential for significant financial and legal implications from accidents or incidents involving third parties, personal liability coverage is equally important.

5. Retirement and future planning with limited resources can benefit greatly from insurance. Individuals who neglect retirement or long-term care insurance risk being unprepared for the difficulties and costs of ageing.

Lack of sufficient insurance can put a strain on a family’s finances, restrict access to high-quality care, and lower the quality of life in retirement.

The Group Managing Director and Chief Executive Officer of NEM Insurance Plc, Mr. Tope Smart, “This is why at NEM Insurance Plc, there is a conscious and intentional drive to educate the populace about the benefits of insurance coverage.

As one of Nigeria’s leading insurance companies, we have embarked on a series of activities to sensitize our target audience on the need for individuals and organisations to embrace insurance as a way of mitigating the effects of unforeseen circumstances on businesses.”

“From impressive motor insurance to home protection, fire insurance, travel insurance, goods insurance and many more, NEM insurance provides a viable avenue for individuals and businesses to mitigate risks and unforeseen circumstances,” Smart added.

Neglecting insurance exposes individuals, families, and businesses to significant financial risks and potential hardships. Recognizing the importance of insurance and securing appropriate coverage, individuals and businesses can protect themselves from unforeseen circumstances by mitigating the potential risks.