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8 Important Types Of Insurance To Protect Your Small Business

Business Insurance

Last Updated on 08/10/2022 by Deepak Singla

There is no limit to what you can do with the help of genuine effort and imagination. Every business has a small start, and as the business grows, more elements get involved. The number of employees, fixed assets, variable assets, production, services rendered, and many such factors are responsible for the growth of a business. The increase in output and the increase in the amount of business you do exposes you to various risks. If you are running a small business, there is always limited cash flow, and whatever resources you have are used sparingly.

At such a juncture, it is essential to protect what you already own and fortify your protective detail. Buying the right kind of insurance ensures you don’t have to suffer losses in case of unfortunate events. Here is a list of insurance policies that can help you.

Insurance to protect your Small business

1. Liability Insurance Policy

As the name describes, a liability insurance policy is useful when you need to take care of any claims that have occurred due to your business operations, because of any of its products, or on the premises of your business. There are multiple kinds of liability insurance policies. Take a look at which one is best for you.

  1. General liability insurance – This type of insurance is useful when businesses need to protect themselves against third parties who file claims. It is beneficial in case of any injuries or damages caused due to business operations.
  2. Public liability insurance – This insurance is tailored to cover you and your business if a third party suffers any damage on the company’s premises.
  3. Professional liability insurance – This type of insurance takes care of the human errors one might make. It is especially useful for architects, engineers, consultants, lawyers, medical professionals, accountants, etc.
  4. Management liability – This insurance is specifically to cover the company’s upper management in case of allegations of wrongdoing.
  5. Contractual liability – This insurance is specially made to protect companies if contractual liabilities arise from leases, rentals, or other business contracts. This insurance policy has got you covered against any financial losses and legal expenses.

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2. Property Insurance Policy

This type of insurance typically protects the property of your business from loss or damage, irrespective of whether it is personal space or a rented space. If you are looking for a shop insurance policy that protects all your tangible assets, then this policy is quite essential.

  1. Building insurance – A building insurance plan covers buildings like shops, offices, warehouses, and other commercial spaces from fires, natural disasters, theft, and so on.
  2. Signboard insurance – If you want to attract customers, a billboard at the right location can help. A sign board insurance enables you to keep your business covered in case of damages to your sign and damages caused to a third party by your sign.
  3. Plate glass insurance – Most commercial buildings have glass on the outside. In case of damage to those glass panes,  doors, or transparent walls, you can lean on this insurance for support.

Apart from these, you can also opt for the burglary insurance add-on or the consequential (fire) loss insurance add-on. Burglary insurance is handy when valuables are stolen, and any damage caused during the theft is covered. The consequential (fire) loss insurance is handy when your business suffers from a fire. This insurance will also cover any loss to your business in terms of revenue.

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1. Money Insurance

This insurance protects your money. It protects items like cash, drafts, cheques, and other such things in case of theft, loss, or damage when it is in transit or locked in a safe.

2. Fidelity Guarantees Insurance

When you are building your business, you may end up hiring employees that intentionally sabotage your business. This insurance will protect you against any financial liabilities occurring due to dishonest or fraudulent acts by an employee.

3. Electronic Equipment Insurance

As advanced as technology might be, there is always a chance of a glitch. Since most businesses rely on electronics, getting insurance that protects you against losses or tangible damages due to electronics failure is essential. It includes software systems as well. Moreover, it also includes the cost of repair or replacement and covers the increased cost of working when the systems are down.

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4. Commercial Vehicle Insurance

Commercial vehicle insurance will cover damages due to or to a company vehicle and its owner-driver in case of accidents. No matter which vehicle you use (school buses, auto rickshaws, cabs, tractors, vans, trucks, etc.) to run your business, getting commercial vehicle insurance for them is mandatory. This insurance covers passenger-carrying vehicles, goods-carrying vehicles, and also special vehicles used for farming or construction purposes.

5. Worker’s Compensation Insurance

This insurance is essential to cover your company in case of diseases, injuries, or accidental deaths that may occur when a worker is on the job. It enables the workers to get the treatment they need at the cost of the insurance policy. It enables employers to adhere to the Workmen Compensation Act and avoid lawsuits.

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6. Group Health Insurance Policy

One of the perks of working for a company is getting health insurance from the employer. Since you would extend the same to your employees, it is essential to know that group health insurance costs much lesser than individual health insurance. Since the company pays the premium, the tax benefits are reaped by the company too.

All these insurance policies are not mandatory but make good business sense. They ensure your employees feel safe and cared for without damaging the company’s funds.