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Insurance’s Role in Job Creation

November 11, 2010

Chris Garlasco, Owner & Managing Partner - Founders Insurance Group

During one of the countless political debates this fall, a candidate described job creation in simple, but in my opinion, very accurate terms. The candidate defined job creation as an “entrepreneur takes a risk. He or she believes that he creates a good or service that is sold for more than it costs to make it. If an entrepreneur thinks that he can do that, he creates a job.”

This statement caught my attention because as a small business person, I not only found this statement to be very true, but anytime the word “risk” enters the conversation, insurance can’t be far behind. I started thinking about the important role of insurance in job creation. As I have said in the past, insurance is simply a product designed to pay for something that we may not be able to afford on our own. The $20,000 needed to replace a totaled vehicle is far cheaper when we pay the insurance company a fraction of that cost should the tragic event happen. A $75,000 heart operation will cost the patient far less by paying an insurance company a far smaller amount to cover that cost for you. Replacing a home that cost $250,000 to build after a fire is far less expensively paid by paying an insurance company a small fraction of that amount to rebuild the home.

With that said, what is our role in job creation? We don’t open the new supermarket. We don’t build the new school. We don’t hire the new employees at a factory. Insurance plays the supporting role that allows the risk to be taken on in order to create, build and hire. Insurance lowers the cost of the risk exposure in order to make it possible for those good things to happen.

The supermarket company spends hundreds of thousands of dollars on the inventory needed to fill the store. In the event of a tragedy, imagine the cost of your groceries if the store had to assume the entire financial risk of having to replace that inventory? Imagine the increased cost in your taxes if your school district had to keep a stockpile of cash around in order to pay for a new school after the current school burnt to the ground? Imagine the massive increased cost to you if a product produced by a factory wasn’t covered by insurance. The list goes on and on.

At the heart of every entrepreneur is a risk taker. In a difficult economy the more entrepreneur’s that America has the better. To those that are willing to take on huge risks in order to create jobs, we at agencies like Founders are here to help diminish those risks.

The next time that you see a new business open its doors, remember, there is an insurance company behind that business helping to make it all possible.

Have a great day!

Chris Garlasco

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