Unexpected calamities such as fire, earthquakes, and flood can do damage to or even destroy your company. Your investments can vanish with these disasters and you will have to start from scratch. Likewise, accidents that result to injuries and death can cripple or bankrupt your enterprise. To minimize the damages and secure your company, it’s important to avail of insurance. But what is business insurance anyway? And how does it protect your firm?
Table of Contents
In A Nutshell
Business insurance is a risk management tool — it is your protection against potential risks and damages and unexpected problems that can harm your company operations. It helps in managing and minimizing the damages caused by sudden problems (such as natural calamities and disasters, theft, on-the-job injuries or accidents, etc.) that can negatively affect your firm.
The Benefits Of Business Insurance
Getting insurance is an essential step, especially for small company owners. This is because small businesses are more prone to risks and financial losses. Having a protection plan is helpful in preventing significant losses due to accidents and calamities. It is best if you have an operational insurance for your firm. This precautionary measure is to ensure that your business can thrive and keep up with the changing conditions of the market. Having an insurance plan is your protection against company failure and bankruptcy.
Also, this insurance ensures the continuous operation of your company despite encountering calamities or disasters. This plan prevents further damage that your business can experience in case of a crisis. Furthermore, this plan protects your firm against possible lawsuits or legal liabilities. It is your backup plan in case something bad happens to your company in the future.
Types Of Plans Available For Firms
There are different types of plans available. The criteria for choosing the best insurance plan depend on the risks that your business may encounter. Before choosing your insurance plan, make sure to evaluate your business. This action will ensure that you are getting the best plan and won’t be leaving any part of your business vulnerable.
Listed below are the 7 types of plans that you might want to check out:
Property cover
This type of insurance protects your properties such as signage, furniture, inventory, equipment, and the like. This is important especially for unexpected events like theft, forgery, vandalism, storm, or fire.
Workers’ cover
This insurance covers the medical treatment, disability assistance, and death benefits of your employees. It covers the cost of hospitalization and medication for your employees as a result of work-related injuries. This insurance plan also protects your business against legal complications. This policy is important even for low-risk jobs because it acts as a security measure against untoward accidents or deaths.
Product liability cover
If your business is manufacturing products for the general market, then this insurance plan is for you. This is your defense against third-party claims and/or tort liabilities. This type of insurance protects your business from lawsuits in case of harm caused by your product. It also covers problems arising from product defect and product malfunction.
Vehicle insurance
Insure your vehicles that carry and transport your equipment, employee, and/or products. This insurance protects your business against any legal liability in case of a vehicular or motor accident. This policy also insures your vehicle and covers legal responsibility for third-party injury.
Business interruption cover
In case of interruption in your business operations, this insurance plan will compensate for your profit. It prevents financial losses when you have to stop store operations due to calamities or disasters. Retail stores and businesses that have physical locations will benefit from this policy.
Data breach cover
This insurance plan is your defense against data breach. It protects private and sensitive information on your business, clients, and employees. It offers support to your business by providing legal advice, monitoring sensitive information, and conducting investigations, among others. This policy covers electronic and physical data breaches that your business may encounter.
Key person cover
This is a life insurance plan for the key person/s in your business. The key person is the individual vital to your company operations, usually the owner or founder of the firm. This policy works by insuring the life of the chosen beneficiary, and providing insurance payoff in case of that person’s unexpected death. The proceeds from this insurance will reduce the financial blow created by the absence of the person crucial to your business operations. This action also provides alternatives for your business other than immediate bankruptcy.
Even for company startups, getting cover is a must. It is an important step in securing the future and success of your firm. Choose the insurance plan that can best address and protect your company against potential risks. You can opt to avail of just one type of insurance for now, or if you need further advise, seek the counsel of an insurance professional who is well-versed in small business insurance.