A “sunk cost” is typically defined as money that once spent is never recovered. If you paint your house and decide you hate the color, you can paint over it with a color you like. Nevertheless, the cost for the old paint was a “sunk cost.” In many ways, commercial insurance is a “sunk cost.” Aside from
Insurance is like a parachute. If it’s not there when you need it, you probably won’t ever need it again.
This is particularly true for many small and mid-market businesses. Unlike large corporations that can usually weather disaster, small and mid-market companies are often one disaster away from extinction.