Whether big or small, entrepreneurs face many challenges in today’s dynamic business landscape. Unexpected events like liability claims, property damage, and employee issues may require them to pay out of pocket for damages that can affect their businesses’ survival and success.
That’s when business insurance provides the much-needed safety net, shielding against uncertainties.
Let’s understand in detail what a business insurance and different types of insurance policies that every business owner should consider.
What is Business Insurance?
A form of risk management, business insurance helps protect a business and its owners and employees in an accident or crisis. Notably, this insurance protects a business’s financial assets, physical location, and intellectual property against unforeseen events that can lead to huge financial losses.
In addition, business insurance manages the company’s risks and helps businesses cover the costs related to any damage and liability claims.
Further, it is advised that new business owners without experience with business risk assessment must go for business insurance. These plans help protect a company from professional and legal liabilities like theft, fire, worker compensations, and medical expenses.
Paying for these damages out of pocket can be quite expensive, so getting your business insured is a good idea to mitigate these costs and gain peace of mind.
5 Must-have Insurance Policies for Different Businesses
Here are the five essential insurance plans that a business owner must buy.
- Workers Compensation Insurance
For business owners, it is important to buy this insurance plan as per the Workmen’s Compensation Act. Workmen compensation insurance compensates workers in the event of bodily injury, disease, disability, or death caused due to accidents while performing their work duties. It also covers medical costs and a portion of lost wages for the employee who has acquired a work-related illness or injury.
- Liability Insurance
This type of insurance protects a business from claims owing to damages or injuries caused during business operations, by company products, or on company premises. For example, general liability insurance safeguards businesses against third-party legal liabilities.
Similarly, public liability insurance policies cover a business against any damages or losses caused to a third party on company premises. Further, a business is covered against any professional negligence or error claim under a professional liability insurance plan.
Moreover, management liability plans protect a company’s directors and executives against liabilities not covered under general and public liability plans. Not just this, businesses can also shield themselves from contractual liabilities resulting from lease and rental agreements and/or other common business contracts.
- Property Insurance
It covers losses resulting from theft or damage to a commercial property (personal or rented) along with its contents. For instance, building insurance covers shops, offices, and other commercial properties from theft, natural calamities, and other causes of property damage.
Property insurance also covers losses specifically related to fire, accidental damages to signboards and hoardings placed outside the commercial property, and damages caused to any large panes of glass on commercial buildings.
- Commercial Vehicle Insurance
Similar to personal vehicle insurance, commercial vehicle insurance protects commercial vehicles, including goods-carrying trucks or passenger-carrying vans, in the event of damage, injury, or liability claims.
Commercial vehicle insurance covers damages and losses caused to company vehicles and their owners/drivers in fire, accidents, and natural calamities. It also offers additional coverage options, including non-owned vehicle coverage, liability trailer exposure, hired vehicle coverage, loading and unloading exposure, and higher coverage limits.
Businesses must invest in this insurance if they have dump and tow trucks, semi or commercial trailers, or vehicles with installed business equipment. Businesses can buy commercial vehicle insurance online from a leading provider like Digit Insurance in India.
- Group or Employee Health Insurance
This type of insurance helps employers cover their employees under one health policy. Such plans are significantly cheaper than individual health coverage and offer significant tax benefits to business owners.
Conclusion
Accidents don’t distinguish; they can happen anytime, anywhere, and to anyone. However, investing in a comprehensive insurance plan can help business owners effectively mitigate the risk. From liability cover and commercial vehicle insurance to workmen’s compensation policies and group health coverage, business insurance is nothing short of a true friend in need.
