Different Types of Insurance You Need to Protect Your Business
If you’re a business owner, whether it’s a small business or a big one, one of the most important things you can do is protect your company from all kinds of risk. But there are so many insurance coverage options and plans available, you might be asking the question – which insurance policies does your business actually need?
Well don’t worry. We’re here to help you with that. Since no two businesses are the same (just like no two people are the same! 😊) there is no “one-size-fits-all’ when it comes to insuring your business. Which types of business insurance you need might vary with your business (for example an engineering firm is very different from a hair salon or a grocery shop and so they will have different risks!).
At a minimum, you should start with these types of business insurance to manage the risks involved in operating your business*:
*Please note that the cost of these insurances as well as the types of coverage you need will change based on your business operations, its size, and the industry you are in.
Types of Insurance Your Business Actually Needs
1. Liability Insurance Policies
A Liability Insurance is there to help protect you against any claims resulting from damage or injury that may be caused by your business’s operations, its products, or on its premises. There are many types of liability insurance:
- General Liability Insurance - A type of insurance coverage that businesses need to protect themselves against any legal liability for damages or injuries to any third party, plus advertising injuries and personal injuries as well as any injuries or damages that take place because of your business's operations.
- Public Liability Insurance - Covers you and your business against any damages or losses caused to a third-party (i.e., anyone other than you—the insured person or business—and the insurance company) on the premises.
- Professional Liability Insurance - Protects you or your business against claims of professional negligence, errors, or omissions. It is most useful for professionals like architects, engineers, consultants, lawyers, building designers, medical professionals, and accountants.
- Management Liability - This insurance is there to protect your company’s directors and officers against circumstances that aren’t usually covered under a public or general liability policy, like allegations of wrongdoing, directed at the company’s managers, directors and officers.
- Contractual Liability - This covers you and your business against contractual liabilities, or those liabilities that you and your business would assume from entering into a contract of any nature, like a lease, rental agreement, or other common business contracts. It will cover you for things like financial losses and legal expenses.
2. Property Insurance Policies
Property Insurance covers you in case of any loss damage, or theft to your commercial property, and its contents, whether it is a personal or rented business space.
- Building Insurance - A building insurance plan insures shops, buildings, offices, and other commercial properties from fires, natural calamities, burglaries, and a number of other damage to buildings.
- Consequential Loss (Fire) Insurance - A fire insurance covers expenses incurred due to consequential damages of property due to fire breakouts. So, if your shop is damaged by a fire, it will help you cover for any loss to your business and revenue that you might face because of the damage to your shop. *Disclaimer - Fire Insurance is not a standalone product. To avail this cover, you need to purchase Digit's SFSP policy with a Fire cover add-on.
- Sign Board Insurance - This covers your business against any accidental loss or damage to the signboards and hoardings that are placed outside and in public from dangers like natural perils, fire, and theft. It also covers against legal liability in case the signboard is the cause of any third-party damages.
- Plate Glass Insurance - A type of insurance policy that will protect your business against any damage or breakage of large panes of glass on your commercial buildings, like shop windows, glass doors, transparent walls, and more.
- Burglary Insurance - This burglary insurance policy covers you in case of theft of cash, jewellery and other valuable products, as well as any losses and damages that can be caused due to a burglary. *Disclaimer - Burglary Insurance is not a standalone product. To avail this cover, you need to purchase Digit's SFSP policy with a Burglary add-on.
3. Money Insurance
It is there to help you protect your business's money and monetary transactions, including cash, cheques, drafts, postal orders. You and your business will be protected in case of theft, loss, or accidental damage to your money, while it is in transit or secured in a safe or cash counter.
Know more about Money Insurance.
4. Fidelity Guarantee Insurance
This protects you and your business against any loss directly resulting from the dishonest acts of your employees during the course of their employment. So, a fidelity insurance will protect your business from any financial costs incurred as a result of dishonesty, theft or fraudulent acts by employees.
5. Electronic Equipment Insurance
This will protect you in case your business’s electronic equipment faces any loss or material damage to electronic equipment (which can include systems software). This includes costs of repair or replacement, loss or damage to any external data, and the increased cost of working when your equipment is out of commission.
6. Commercial Vehicle Insurance
A Commercial Vehicle Insurance policy will cover damages and losses caused to or by a commercial vehicle and its owner-driver in situations like accidents, collisions, natural calamities, fires, etc.
If your business owns one or many vehicles, or involves the use of vehicles, such as cabs, this coverage is essential. This type of insurance covers passenger carrying vehicles (like cabs, autos, buses, etc.), goods carrying vehicles (like trucks, tempos, lorries, etc.) and any special vehicles used for farming, mining or construction.
It is mandatory for all businesses to buy a commercial vehicle insurance for their vehicles, such as for auto-rickshaws, cabs, school buses, tractors, commercial vans and trucks, amongst others.
Know more about:
7. Worker’s Compensation Insurance
This policy is for employers when they provide compensation to their employees in case of accidents that happen while they are on the job. It covers employees in the case of diseases, bodily injury, disability, or death caused due to accidents in course of employment and helps them to get the care they need.
By doing this, it enables employers to meet the requirements of the Workmen Compensation Act and protection from lawsuits.
Know more about Workmen Compensation Insurance.
8. Group Health Insurance Policies
- Employee Health Insurance - An Employee Health Insurance is a health insurance plan that covers the employees of an organization, under one policy, where the premium is borne by the employer. The price for the same is comparatively a lot less as compared to individual health insurance plans and, it also benefits employers in tax reductions, therefore making it beneficial for both the employer and employee.
- Group COVID–19 Cover - COVID-19 Group Protection is a health insurance policy that is designed to cover employees during the coronavirus pandemic. It provides coverage for any medical expenses that they may have during treatment for COVID-19.
So, if you have been wondering “what type of insurance does me business need?”, these policies will give you a good head-start at protecting the business you have worked so hard to build!