Last Updated on 21/02/2019 by Deepak Singla
The moment you decide to pursue as an entrepreneur, you expose yourself to certain risks. You also accept the fact that not every part of your business is alluring. To putyourself on a safer side, insurance is a reliable term, which is pretty much norm these days. Same goes with a business as well. When one lawsuit is enough to wipe out your business before it has a chance to reach its heights, corporate insurance can be your saviour here.
Fortunately, businessmen also have access to a fraction of insurance types to protect their business from unseen circumstances. While insurance is not a new concept for all of us, most of the business owners are aware the fact that they need insurance coverage.
Figuring out the appropriate coverage for the business and policy limit may appearpretty complex in the beginning. However, once you settle down with an idea regarding where to invest, the half of the battle is already won. Getting insured is the only wayto save your business from potential hazards.
Here, a question might strike your mind surrounding what specific risks the different types of insurance actually protect against. Well, to ensure your new business in all unforeseen situations, here is a list of Commercial Insurance Policies that you can opt for or perceive if they work for you:
Arun, 40, was a married man with two children. He got a heart attack, leaving his family without much financial support. He kept postponing to purchase a life insurance policy, ignoring the swaying efforts of his friend who is a life insurance agent. Fortunately, the company where Arun worked had a group life insurance for all its employees. Arun’s family received some additional financial security post his demise; all thanks to that group insurance policy.
The above incident clearly exemplifies the significance of Group Health Insurance or Group Life Insurance. As the name suggests, Group Insurance is designed to protect a group of people under a single master policy. Group Insurance is again split into few categories, such as
- Group Health Insurance
- Group Life Insurance
- Group Personal Accident plan
- Group Travel Insurance
Group Health Insurance
In this plan, a defined sum is assured to a group of people, usually the members of societies, employees of the same company or so on. In some cases, it provides cover to the family members of employees as well. The benefits that the plan covers include Cashless facilities most of the times, maternity-related facilities, pre or post hospitalisation charges for a specific period, coverage for specific surgeries, which requires less than 24hr of hospitalization.Domiciliary expenses are included in some plans.
Group Life Insurance
Safety or financial security of your family isyour utmost concern. A Group Life Insurance plan takes care of this concern by ensuring financial assurance to one’s family in case of the unfortunate demise of a group member. The facilities covered by this plan include Group Life Insurance facilitates to select your beneficiary, you can avail this policy at a lower premium as compared to a personal life insurance policy, full life coverage to the members, annually renewable term plan, worldwide coverage, quick claim settlement, tax benefit etc.
Group Personal Accidental Plan
This comprehensive plan offers complete coverage during the event of accidental death, partialpermanent disability of a policyholder. Based on the group’s strength, you can avail this plan on discounted rate as well. A Group Personal Accidental Plan covers accidental death of a policyholder (group member), where the insurer will pay the principal amount to the nominee, compensation on sum assured, in case of an injury causes a partialpermanent disability, fully-disabled for a tempory period can avail weekly compensation, reimbursement of ambulance charges who meets with an accident and taken to the hospital, mortal reimbursement for transportation, etc.
Group Travel Insurance
Since travel has become an essential part ofthe growth of any business in a substantial manner, as an employer, it should be your main concern to protect your employees or your business from the issues that may arise while travelling. Corporate Travel Insurance can be a savior for both of you in this regard. This insurance plan is associated with the employer, where the company invests money in protecting its employees from travel-related problems like flight cancellation, loss of baggage or important documents, hotel cancellation etc. This plan covers medical expenses during a trip, loss due to trip cancellation, loss in checked-in luggage, loss due to natural disaster etc.
Why Do You Need Group Insurance?
Having a Group Insurance Plan has its own perks. A few of them are listed below:
- A Group Insurance Policy offers financial support to the family of the employees and keeps them in a stress-free
- A stress-free mind can contribute to more creativity and leads to significantly high productivity. When an employee feels secure, he wouldn’t hesitate to go extra miles to his fulfil employment objectives.
- It also helps the employer to retain the talent. The group plan makes the employees feel as a valued part of the organisation, which motivates them to keep going.
- These policies reduce the savings in the hands of an employee. As compared to a standalone life insurance policy, the premium of group LI is 30% less than that for a normal one. Here, employee gets more in hand compensation.
- The most appealing benefit that one can avail is a tax benefit. The amount contributed towards a group life plan is considered as business expenses, and is hereby, exempted from tax.
However, being the most appealing insurance plan, one should keep in mind that group insurance is not denigration free due to few of its shortcoming
- You can avail the benefits only if you are a member of the group. The coveragetends to cease once you leave the organization or group.
- The sum assured under group life insurance is limited, as it is a group plan. The coverage may not be enough to support the full financial expenses of a family.
General Liability Insurance
General Liability Insurance protects anemployer from any kind of third-party damage and/or injury claim. For instance, you own an office where clients’ visits happen frequently. If any of your clients face a mishap on your premise or to their property (let’s say Car) on your premise and that client seeks coverage for the damage,your liability insurance is here to your rescue. This won’t leave you scrambling to pay for the odds and bear all expenses one your own. This policy is generally advisable for those who have frequent in-person interactions with clients, customers, or partners.
Workers’ Compensation Plan
Workers’ Compensation Insurance benefits both an employer and its employees. If an employee becomes ill or gets bodily injuries due to an accident caused during the employment, the expenses will be covered by this plan. On the other hand, your business is protected from any lawsuit that could have happened due to this incident.
Commercial Property Insurance protects your business from the loss of own property. If you own an office space or any personal property being used for business, you will definitely like to have property insurance, as it bears your expenses incurred due to fire and theft. Some small businesses also opt BOP plan, which includes both the General Liability Insurance and Commercial Property Insurance in a minimal package.
Cyber Insurance rescues your business from all IT-related crisis. It protects your business from cyber attacks. Research says that 90% of cyber attacks impact reversely on small businesses. If your business witnessed a data breach, you would be subjected to defending yourself legally, which can be expensive. Cyber Insurance covers the expenses like legal defence, settlements, loss in business, reputation damage etc. Without a plan, these expenses can quickly add up and sometimes leave your business at a point from which it could be impossible to recover.
If a company vehicle is to be used, then it should be insured to protect the company from any legal liability due to an accident. If the employees use their personal car for business, then their personal insurance will cover them in the event of an accident.
Errors & Omissions Insurance
Also known as Professional Liability Insurance, E&O Insurance assures your safety in case of mistakes or errors made while serving a client. Service providers and consultancies are highly advisable to have this policy, as their interactions with the clientsare huge. If a client sues your organisation for the negligence that they believe caused them a major financial loss, E&O Insurance Plan will cover the legal costs during the policy term.
Directors and Officers Insurance
Directors and Officers Insurance is a must have Insurance policy for large organisations, as it protects your company from the risk of shareholders lawsuit. It protects the company’s board of directors, in case they are sued for a decision made during the course of their tenure. This policy is also helpful in case of bankruptcy. Your business can be sued by shareholders, vendors or other third parties to collect their investments if the company declares bankruptcy.
Whether you own a small business or an established one, the selection of an insurance plan is quite a sensible thing for your business. You can’t afford any mistake here. Hereby, taking the time to determinate the proper insurance plan with an exact amount of coverage to protect your trade is what can make all the difference. An expert advice is must and all what we can suggest!