Guide to Business Insurance

Business insurance is designed to protect businesses against financial loss, which can be caused by theft, lawsuits, equipment breakdown, and business interruption, among other risks. Each industry and business has its unique risks. Therefore, a business should tailor insurance according to its specific needs.

Factors to consider when selecting business insurance include:

  • Number of employees
  • Size of the business
  • Working conditions
  • Materials dealt with
  • The number and types of business assets
  • Nature of services or products being offered

The different types of business insurance include:

Professional Indemnity Insurance- For Business That Offer Advice or Service

If your business offers advice or service such as accountancy, consultancy, and legal service, you should take professional indemnity insurance. This will protect you if a client claims negligent or poor advice. If your work damages a client’s reputation or causes loss of sales, this policy will help in covering legal costs and claims.

  • A client can confirm if you have professional indemnity cover before they use your services.

Small Business Insurance- For Small & Medium-Sized Businesses

This is a type of insurance that caters to smaller businesses. The needs of a small business are different from that of a big business. Therefore, there is the need for a custom-made insurance solution.

Small business insurance will provide vital protection for a startup where a small financial loss can lead to business failure. It will help a small business to get up and running after a loss of earnings.

Landlords’ Insurance- For Home Rental Businesses

Landlords’ insurance will cover you from financial losses associated with renting properties. It will cover risks such as malicious damage, theft, water damage, lightning, and fire.

Rent Guarantee Insurance- For Home Rental Businesses

This will protect you from loss of rent in case a tenant defaults. The policy can cover the costs of evicting a tenant and the legal costs of recovering rent.

Home-Based Business Insurance

Your homeowner policy cannot cover your home-based business. If you are operating your business from home, you need a home-based business policy. This will cover your equipment and inventory.

Marine Export & Import Insurance- For Exporters and Importers

This policy will provide compensation to an importer or exporter for the damage or loss of goods while in transit on the high seas. It covers different perils.

Cyber Insurance- For Internet Based Businesses

If your business is exposed to internet-based risks, you need this policy. It will protect you from risks associated with denial of service attacks, hacking, and data destruction.

Cargo Insurance- For Transport and Logistics Businesses

This protects against the potential physical damage or loss of goods during land, sea, or air transportation.

Public Liability Insurance- For Businesses Where Customers or Members of the Public Visit the Premises

If a client is injured at your business, this will cover the claims and legal fees. Membership to a professional organization can sometimes provide you this cover. Other times, you may need to take out a specific policy, it just depends upon your business situation.

Employers Liability Insurance- For Businesses with Employees

You are legally required to have this cover if your business has employees, whether they are permanent, seasonal, or temporary. The only exception is for a home-based business where a close family member has been hired.

This policy will protect your business from claims arising from injuries that employees sustain in the workplace. Most insurance companies offer employers liability insurance for up to $10 million.

Product Liability Insurance- For Businesses that Supply Products

This will provide compensation to anyone who has been injured because of a product you supplied, repaired, or designed. You don’t have to be a product’s manufacturer to be liable for damages.

Tradesman Insurance- For Tradesman Businesses

If you have a tradesman business, you not only need public liability insurance. You also need tradesman insurance.

Business Property Insurance- For Businesses that Own Properties

This will cover the theft, damage, or loss of your business property which includes stock, equipment, computers, and furniture. Risks covered include vandalism, accidents, fire, and natural disaster.

Business Interruption Insurance

This will cover you from the loss of sales and profits when your business is unable to operate because of unforeseen circumstances.

Key-Man Insurance- For Valuable Employees

If there are employees who are essential for the operation of your business, you should insure them. If they are not able to work, you will be compensated for the loss.

The Bottom-Line

By having the right business insurance, you will avoid a major financial loss caused by a catastrophic event or a lawsuit. Don’t look for the cheapest option. Instead, find the right package at the right price.

The right cover will keep your business running during emergencies, will protect against lawsuits, will protect your employees and it will make your business credible in the eyes of vendors and clients.

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