5 Important Types of Insurance for a Corporation

Regardless of the size of a business, it will still face risks such as lawsuits, natural disasters, property damage, and cyberattacks, which may jeopardize its finances. To give you an idea, an average US corporation handles multiple lawsuits at a go, some of which cost up to billions of dollars, as published in the Insurance Journal. This means that large businesses should also brace themselves for such perils by purchasing the right business insurance policies. While business insurance will not prevent such perils from occurring, it will put your business in a better financial position to handle the resulting losses. Keeping this in mind, here is a look at five important types of business insurance policies for a corporation.

Business Content Insurance

Events such as vandalism, natural disasters, data breaches, and fire are a threat to your corporation. The losses due to such events can be either huge or small. While you may be able to cover small losses out of pocket, huge losses could force you to shut down your operations either temporary or permanently. This is where business content insurance comes in handy. Mark Vanzo from Smart Business Insurance says – “Specifically, it covers your business assets, including equipment, furniture, computers, and stationery”. Take note that you can significantly reduce your business content insurance premiums by disaster-proofing your premises and installing anti-theft features. For instance, installing CCTV surveillance and burglar alarms can substantially lower the risk of theft and vandalism. Also, remember to keep an up-to-date inventory of your business possessions in a safe place for the smooth running of the insurance adjustment process in case of damage.

Public Liability Insurance

Notwithstanding the safety measures in place, your corporation could face a lawsuit for third-party property damage and bodily injuries. For instance, if your factory emits detrimental gases in the atmosphere, causing massive allergic reactions among the nearby residents, your corporation can face multiple lawsuits. Depending on the sizes of the lawsuits, your business finances will be on the line, and hence, you should strive to protect them. The right public liability insurance will pay for third-party claims, medical expenses in case of hospitalization, funeral expenses if there’s a fatality, death benefits, and third-party property replacement. Put in mind that proper liability risk management can lower the chances of your corporation facing a lawsuit, though it won’t offer full immunity, per the Insurance Information Institute (III).

Workers’ Compensation Insurance

Unless your corporation is located in Texas, you have a mandate to purchase adequate workers’ compensation insurance for your employees, according to the US Department of Labor (DOL). This is because injuries and illnesses happen at the workplace every year, putting employees in bad physical and mental states. For instance, in 2019 alone, there were about 2.8 million nonfatal injuries in the US private industry, as reported by the Bureau of Labor Statistics (BLS). As such, you should get workers’ comp for all your employees regardless of the nature of business operations they undertake. This is because injuries can result from simple accidents such as slipping on a wet floor to complex ones such as being run over by a bulldozer. In case of such accidents or work-related illnesses, the workers’ compensation insurance policy will pay for the medical expenses, lost wages, funeral costs, and death benefits depending on the severity of the injury.

Commercial Auto Insurance

According to the National Highway Traffic Safety Administration (NHTSA), at least 6 million road accidents happen in the US annually, 6% of which result in at least one death. This shows just how risky driving your fleet vehicles is and why commercial auto insurance coverage is necessary. While training your drivers on safe driving can help mitigate the risk, it won’t entirely eliminate car accidents. As such, you should protect your business finances by having the right car insurance policies for all your fleet vehicles. This way, the insurance company will cover the costs of the damage incurred, including medical expenses for the injured, repair costs on the vehicles, and third-party liability costs if your business vehicle hits a pedestrian or crashes into a roadside building.

Cyber Insurance

While small businesses are also at risk of cyberattacks, criminals mainly target large businesses and corporations, due to the potentially enormous profits at hand. Every year cyberattacks cost the American economy at least $100 billion, as per the Homeland Security Digital Library (HSDL). It is worth noting that a single cyberattack can bring your corporation to its knees depending on how much it costs. With this in mind, you should purchase suitable cyber liability insurance to protect your business finances in case of such attacks. This policy pays for third-party claims, costs of rebuilding the network, ransoms, data recovery, and legal expenses, among other costs. Apart from insuring your business, you should also practice safety measures that can shield your business from cyberattacks. They include, among others:

  • Training your employees on safe usage of electronic devices
  • Installing a firewall
  • Using strong passwords and updating them regularly
  • Updating your software regularly
  • Avoiding logging into your business network on public WIFI

Conclusion

To protect your cooperation adequately, you need to carry all the important business insurance policies including cyber, commercial auto insurance, workers’ compensation, public liability, and business content insurance. To get the right business insurance for your corporation, be sure to consult an insurance professional for proper guidance. Because different business insurance policies have different exclusions, ensure you go through the fine print with a fine-tooth comb.

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