If you want to set up your business in India, it's not going to be that easy. We've got a lot of diversity in India, and also, considering the trend swings, we can't ignore the risk factor. In certain circumstances, you may suffer huge losses, even if you have done most things right.
Business insurance always proves to be a lifesaver whenever tough circumstances arise in business. If you want peace of mind while doing business and stay safe from unanticipated damages, you should always have business insurance.
There are numerous insurance companies out there. Deep research becomes necessary as even very small terms/conditions can make huge differences. You can check out:
- Reviews from the existing customers of the company
- Company's previous records
- Extra benefits on offers
- Level of flexibility
- Necessary documentations
You can run a risk-management audit to check potential damage liabilities and costs.
Did you know?
There are 57 insurance companies in total in the Indian insurance industry. 24 out of these offer life insurance, and 34 are non-life insurers. LIC is the only public sector company out of these.
Types of Insurances
If you run a small business, here are the most recommended insurance types for you to start with.
Property Insurance
Property insurance covers the most important aspect of your business. The property holds unmatched importance, whether you're on rent or own it. Property insurance will cover damages to your equipment, furniture, inventory and indicators from theft, fire, storm, etc. You can buy additional policies to tackle losses caused by natural issues like earthquakes and floods.
Workers Compensation Insurance
Manpower is a compulsory aspect of running any business, and when they're operating for you, you need to look after their well-being. You can depend upon worker's compensation insurance, as it covers disability, medical treatment and death-related benefits if the workers die during working hours. However, this insurance doesn't cover any of these outside the working hours.
Home-Based Businesses
Many people prefer running a business from their home online, while a few have constructed small retail shops in their homes. If you're the one, you should go with a homeowner's policy, as it will cover the inventory and equipment of your home-based business. It can benefit many such businesses, but this policy doesn't benefit large commercial property.
Also Read: Insurance- Functions, Benefits & How it Works
Business Interruption Insurance
The name itself indicates its purpose. This type of insurance is getting popular rapidly, especially after the pandemic. Most shops were closed during the pandemic, and as they couldn't carry out their business activities, business owners faced financial disbalance. How will you cover the loss if the same happens in the future?
Business interruption insurance can be a decent solution. You'll get compensation for income lost because of the unpredicted occurrences. This insurance is only for fixed stores and shops.
Professional Liability Insurance
If you've got employees working for you, you can't guarantee that they'll do everything perfectly. What if they make any mistakes that turn out to be a huge loss for you? Professional liability insurance covers such sorts of damages. You enjoy claims under error and omission insurance or professional liability insurance.
Commercial Auto Insurance
Insurance for commercial vehicles is similar to private auto insurance. It protects your vehicles, trucks, or vans in the occasion of injuries, damages and liability issues. Commercial auto insurance offers additional protection. It includes liability and property trailer exposure, loading/unloading coverage covered by hired vehicles and non-owned vehicle coverage.
One generally needs such insurance if the vehicle is used for business dump vehicles, trucks, snowploughs, semi-commercial or commercial trailers.
General Insurance for Liability
Among the most important business insurance in India, general liability insurance is included. It can be pronounced as commercial or business liability insurance. It provides protection for different claims such as bodily injury or damages to property, personal and marketing injuries or medical expenses. Also, it’ll be useful for the damage to the property which you rent to.
General Liability Insurance should cover every small contractor or owner of a business. When purchasing small business insurance or looking at policies, consider that the rates will be contingent on your business's particular features.
Employment Practices Liability Insurance
Smaller companies with employees frequently benefit from employment practice liability insurance. This sort of insurance will secure you if an employee takes action against you for unfair termination or discipline or discrimination, harassment, sexual or negligent evaluation. Also, it includes employment contract breach and employee benefit mismanagement, or the wrongful infliction of emotional distress.
Certain insurance companies provide EPLI as an independent coverage, while others offer EPLI to endorse their BOP. Your policy's terms/conditions will be contingent upon the type of coverage you select. The type of business you run, the number of employees, and other risk factors contribute to the price of EPLI.
Also Read: Impact of GST on Insurance and Banking
Insurance for Professional Liability of Contractors
If you have an interest in the design-build and construction management sector, you must buy a certain type of professional insurance. The insurance protects professionals from mistakes in construction or the loss incurred during the designing, engineering and construction of a structure. It also protects against errors committed by third-party vendors involved in the project.
Insurance for Management Liability
The management liability insurance product is a mix of insurance policies that protect both public and private businesses from various risks to their board. It guards against the risk associated with managing a business. Businesses purchase it with a board of directors. An average management liability insurance policy covers employment practices responsibility, fiduciary liability, and so on.
Insurance for Business Renters
Renters insurance is crucial for businesses that operate in more rental space. This insurance for work will protect against incidents occurring within the premises, such as flooding, fire, or accidents and property or building damage caused by natural catastrophes. The type of insurance can cover the same things that other policies do. However, it is only applicable to rented areas specifically.
Credit Insurance
Small-scale businesses with credit cards or loans can purchase credit insurance, also called security insurance for payments. Credit insurance assures that the payments will continue to be paid if any financial crisis happens (such as disability, death, or unemployment). In contrast to disability insurance, the credit insurance policy does not pay the employer. It just pays your creditors the amount you owe.
Cyber Insurance
In this digital age, safeguarding your company's tech is vital. Small-scale businesses should lay emphasis on cyber insurance to safeguard themselves against the effects of cyberattacks such as ransomware, viruses and data breaches. Cyber insurance could include insurance for data breaches (which is great for helping small companies recover) and cyber-related liability insurance (geared towards larger companies who require more protection).
Commercial Umbrella Insurance
Commercial umbrella insurance can increase the coverage limits of certain of your liability insurance policies. If you have a claim that exceeds the amount of coverage on your policy, your umbrella insurance could aid in covering the difference. Besides all these insurances, you can look through the best government loan schemes as well.
Things to Look Out for When Purchasing Insurance Policies Online
- Benefits from service - It is necessary to consider the advantages of service. Benefits like 24/7 customer support as well as a simple pick-up and drop for your vehicle.
- Pick the appropriate sum insured. The correct amount insured will ensure that you're fully protected in emergencies.
- The speed of claims for the insurance company is why you take out insurance. Check how long the insurer will take to pay claims. Also, identify the company insurance policy deeply.
- Best value - If you’re glad about the services along with the amount insured, make sure to check the cost and discount you're getting.
Conclusion
Numerous types of insurance can support you in tough times while running your business. You won’t get one big insurance covering almost everything. It depends upon you which sort of protection do you want the most. You can also have multiple insurances.
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