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12 Types of Insurance a Small Business Owner Should Have

Businesses, everywhere in the world, need an insurance cover, and small businesses in India are no exception. Business owners rely on these insurance policies to protect their businesses from any unpredictable damages or loss under any circumstances, whether it’s a man-made disaster or loss from natural calamities.

There is a wider range of insurance policies like business liability assurance offering third party cover, commercial auto insurance policies, and property insurance plans and so on. To meet the interest of all the businesses, insurance companies provide various insurance plans as per their needs.

Small business insurance

Therefore, if you are a business owner, you should mull over investing in these 13 insurance plans aligned just to help you safeguard your business from any unforeseen loss or damage:

1. Auto Insurance Policies

If you and your organization happen to use a four wheeler, two-wheeler, bus, or any commercial or non-commercial vehicle for business purposes, it will be given a cover from damage and accidents on the road, under your business auto insurance plans. It is also imperative to have third party car insurance especially, if the vehicle is being used for company purposes. It will safeguard your employees or workers who are commuting in it. Also, it will cover any damage to your products or machinery during the transit.

In cases, where your workers or employees happen to use their own vehicle for work purposes, then they should also be given a cover, especially, if they do not have personal insurance. Vehicles, which you do not own, but are used for official requirements are given a cover under your auto insurance policies for business purposes.

2. Third Party Insurance

It is considered to be a mandatory norm of every insurance plan. Whether you are running a commercial business or a non-commercial business, it is necessary to have third party liability cover. It offers coverage to the insured person and their organization against any financial, physical and legal obligations, arising out of their negligence or unpremeditated torts.

It also covers the risk or claims against you and your employees from any injury, loss or damage caused to a third party by your products, machinery or services. There are certain other circumstances under which you and your organization might have the liability to cover the damage or loss incurred to the third party.

Moreover, your insurer also protects you for legal payouts and covers you under every emergency situation, all adhering to the limit agreed in your insurance plan. You also get covered from any outside-the-court legal proceedings. You get cover from various liabilities including credit and product liabilities, directors’ and officers’ liability, environment liability cover, crime insurance, clinical trial liability cover, as well as employment practices liability cover. There are certain exceptions that you would need to ascertain as they vary from insurer to insurer and policy to policy.

3. Official Property Insurance

For those who are operating business on their own land, or rental places, there is insurance cover given to all the assets that are included in your business premises or infrastructure. It will protect your assets against financial or physical damage expenses and cover repair and replacement of your furniture, systems, inventory, burglary, wreckage etc. You may also want to include income protection cover to safeguard your business under debt or losses.

4. Business Owner’s Insurance Policy

Under this policy, the insurer would get a comprehensive cover from business related risks, like disruption insurance, assets insurance, automobile coverage, liability cover, and protection against criminal activities. You can also customize it as per your organization’s needs.

The premium which goes into the insurance policies is worth the investment, as this cost is certainly less as compared to any loss due to destructions.

5. Reparation for Workers

You would want to consider this to insure your workers from any injury that may take place during work hours or whilst on duty. You will get their medical expenses covered and also income replacement, in case of an injury within office hours. It offers security from any legal compliance and also averts the consequences of being sued by your employees or workers.

These are certain benefits which all the workers would expect from their business owner.

6. Professional Liability Insurance

Mostly lawyer firms, chartered accountants, insurance service providers, loan providers, real estate groups, and other technology firms, keep themselves covered with this insurance plan from business uncertainties. It safeguards them for any financial loss or damage arising due to their professional incapability or failure to provide the services to their customers as promised.

Senior management insurance

7. Senior Management Insurance

The senior officers and directors of an organization need to have themselves covered under this plan. It offers protection against legal formalities, loss of profits or any other operational troubles.

8. Data Violation

This is for any organization maintaining security, if its data is a priority. It is an important business ethics to not leak any confidential data or information, to any source outside work. It is of utmost importance to enhance security against the breach of any official information, which is related to any of your projects, clients or any internal data (via hard copy, soft copy of any other medium, verbal, written or digital).  This policy will secure you from any loss or damage, arising due to such information outflow.

9. Shop Owner’s/ Property Owner Insurance

Under this, your house and shop will get a cover against any loss or damage arising out of fire, burglary, housebreaking, forgery, criminal acts, natural calamities like earthquake or floods etc. It is designed to give a cover to the policy owner from any damage and emergency confronted by him. All legal, financial and accidental damages are included. This policy is a true savior from all the possible dangers in your business.

10. Leaseholder Insurance

It is sub-set of the above policy, covering you from any risks arising from lending your office space or personal space on rent for official purposes. So, you will be insured for any property damage or financial loss within your space.

11. Life Insurance

This will give you a personal cover from any risks imposed on your life due to your sudden demise or under any fatal circumstances. You need to give name of your beneficiary to the insurer, so that he/she can claim the sum assured. The sum assured depends on the premium which goes every year to your insurance company. This will secure your business from any losses, which may happen in your absence, and helps to continue the legacy of your business without any financial and legal troubles in future.

12. Key Insurance

Some employees become an inevitable part of the business. Nothing can be more unfortunate than losing one such influential employee, due to any unforeseen situations. This is enough of a reason to disrupt the entire functioning of your business process. To maintain your operational functioning under such circumstances, you would need a key person insurance business policy, in order to secure your company’s profit and keep leadership intact.

Wrapping it up

If you are a business owner, you must realize how much effort and money goes into establishing it. For its smooth functioning and hassle free growth, you must consider the above mentioned insurances which every business owner should keep in place before or after commencing his/her own business projects.

About author

Ivan Widjaya
Ivan Widjaya 3165 posts

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

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