Different Types of Insurance You Need to Protect Your Business

10 Types of Insurance your Business actually needs

General Liability Insurance

A General Liability insurance is there to protect you against any claims by third parties for any kind of damage or injury that was caused by your business’s operations, its products, or on its premises. 

For example, if a client or a delivery person comes into your office, but they don’t see the "caution wet floor sign", and ended up slipping, falling and breaking their arm, this type of business insurance can help pay for their medical bills.

Without this coverage, such accidents involving third-parties can lead to huge legal bills. It will also help to cover your business against any claims of copyright issues, libel and slander.

Management Liability

This kind of insurance is there to protect your company’s directors and officers against circumstances that aren’t usually covered under a general liability policy like allegations of wrongdoing, directed at the company’s managers, directors and officers.

For example, it protects your business from financial losses that might arise out of any claims of things like discrimination, harassment, or wrongful termination brought against them in their capacity as directors and officers while managing or running business operations.

While it is often overlooked by business owners, it is actually one of the MOST important insurance covers to protect not just your business, but the directors and managers as well. It will protect you against all kinds of unpredictable and potentially large liability claims, as it can cover costs or damages lost as a result of a lawsuit.

Professional Liability Insurance

This kind of business insurance is essential for your business if you provide services or advice (such as consultants, contractors, accountants, developers, architects, designers, event planners, or even lawyers, or doctors). It will protect you against any claims of negligence, inadequate work, errors, or malpractice from your clients or customers.

For example, if you have an architectural firm, but you end up going over budget or missing a deadline which causes the client financial damage, this insurance will be there to cover you against financial losses and help you out with things like legal expenses.

It will help your business run more smoothly, as you won’t need to worry about expensive lawsuits, and as an added bonus, your customers and clients will appreciate the guarantee of being compensated in case something goes wrong!

Contractual Liability

Contractual liabilities are 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 contract.

Even if you’re covered by a general liability insurance, which will protect you from many day-to-day operational risks, it may not provide coverage in these instances.

But with a contractual liability insurance, you will be protected even when your business has entered a contract with an indemnity agreement (also called a hold harmless agreement), or where you have assumed any liability on behalf of someone else for third-party bodily injury or property damage claims. It will cover you for things like financial losses and legal expenses.

Worker’s Compensation Insurance

Also known as Employees Compensation Insurance, this type of insurance policy will provide coverage for your business’s employees in case they get injured or become disabled as a result of their jobs.

Say you own a restaurant and one of your chef’s accidentally cuts their finger while cooking, with this insurance, they will be get compensation for their medical expenses, and even lost wages, without leaving your business at a financial loss!

This is very important for you to have as a business owner not just to protect your employees and workers, but also to protects yourself and your company from legal complications while keeping it in line with The Workmen's Compensation Act, 1923.

Employee Health Insurance

Group Health Insurance is a type of health insurance plan that covers a group of people who work under the same organization, such as its employees, under one policy. It is usually offered to employees as a healthcare benefit, and since the risk is spread across a pool of insured individuals, your business is able to keep premiums low. 

And in turn, whether your business is small or large, this type of insurance helps to ensure that your employees are and less likely to be burdened by financial stress is likely to boost attendance, productivity, and even your profits!

In India, the Ministry of Home Affairs has recently made it mandatory for all employers to offer group health insurance coverage to their employees (even after the COVID-19 pandemic is over).

Property Insurance

A property insurance is an insurance policy to protect your business’s shop or office premises from any risks such as fires, burglaries, natural disasters, and other unfortunate incidents.

After all, you probably want to do everything in your capacity to ensure that your business no great losses. In case say, a fire damages your office building, with this insurance coverage, the building, as well as the contents of your business and, valuables such as cash in safe or shop counter will all be covered and you will be able replace your equipment inside.

Basically, a property insurance is vital to protect your business, whether it’s a restaurant or a clothing boutique or an accountancy office, from any potential losses and risks that could arise out of circumstances out of your control, including natural calamities and burglary

Consequential Loss (Fire) Insurance

A Consequential Loss (fire) policy (which is also sometimes known as a business interruption insurance) will be there to compensate you for consequential damages.

For example, if your shop is damaged by a fire (which we hope never happens!), while a regular property insurance will cover your shop and the contents, a Consequential Loss policy you will also be protected for any loss to your business and revenue that you might face because of the damage to your shop. It will even cover operating expenses like electricity, which will continue even though your business activities have come to a temporary halt.

So, basically, with this policy it will make it all the more easier for you to minimize your losses and get right back into running your business, even after you have gone through a terrible ordeal!

Commercial Vehicle Insurance

If your business owns any vehicles, or even just one vehicle, it’s essential to get a commercial vehicle insurance. It will help to financially protect and cover you from any losses and damages caused to your vehicle, and the people driving it, as well as any third-party accidents.

For example, if your worker is using your company’s van for a delivery and accidently hits a someone’s car while leaving your business, this coverage can help pay for this third-party's damages.

So, basically, if your business owns, leases or rents vehicles and has employees who drive for work-related purposes, like cab services or commercial buses, a commercial vehicle insurance is essential. It will help to reassure your stakeholders and passengers that they will always be protected.

Also remember, that it is mandatory to at least have a Liability Only policy in place (to protect any third-parties) according to the Motor Vehicles Act in India. 

Group Covid Cover

And, speaking of COVID-19, another kind of business insurance is essential these days is a COVID-19 Group Protection. This is a health insurance policy for groups 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 and will also help ease your financial burdens at such a point.