According to the former Chief Justice of India, Deepak Mishra, more than 3.3 crore legal cases are pending in India in 2018. If you are a business owner who doesn’t want to join this ever-expanding list, you should consider getting insurance for your business. It will ensure that you (the business owner) and the entity you have formed stays away from court cases and resolves disputes in a comparatively easy manner.
In case you are sure that your business in India needs insurance, you should find out which insurance do you need most. Though there are numerous types of insurance you can opt for, the most highly recommended ones are mentioned right here.
1. General Liability Insurance
This business insurance ensures that you, your products or services or your employees get protection if someone claims a property or bodily injury. It offers defense and damages both. An example of its application could be the fact that 25 kids fell ill after having mid-day meals at a school in Delhi. If the provider had general liability insurance, he or she would be protected from lawsuits or financial claims.
2. Business Owner’s Policy
This policy is a package that covers various insurance types such as liability insurance, vehicle insurance, property insurance, crime insurance, etc. You can decide what insurance you need and create a bundle of services that is often cheaper.
3. Property Insurance
This business insurance is applicable to all property related to a business. This policy is meant to cover everything from buildings, to office space to office equipment, to inventory to tools. This business insurance provides coverage against theft, vandalism, fire, smoke damage, etc. An example of why every business in India needs insurance, especially property insurance is that Kolkata Bagri market fire. In that incident, businesses worth 80 crores were destroyed.
4. Professional Liability Insurance
This business insurance is a must for businesses that offer a services such as hair salons, real estate agent, a freelance content writer, etc. It ensures that protection is offered if a person fails to render a service due to any reason.
5. Product Liability Insurance
This business insurance is needed by manufacturers. It offers protection in cases where a user claims that the product manufactured is not worth the price assigned, or that the product has caused any kind of damage. Make sure that the coverage offered in this insurance is tailored according to a specific product for better protection.
6. Auto Insurance
Though not strictly business insurance, personal auto insurance is vital these days. It protects you and your employees from physical damage and bodily injury due to crash or accidents. You should also seek commercial auto insurance to protect the company’s vehicles in cases of accidents or theft. An example could be of Renault-Nissan manufacturing facility wherein two employees stole two brand new SUVs using fake out-pass.
7. Homeowner’s Insurance
Did you know, that those often work from home or run their business via a home office should seek are a eligible for an homeowner’s insurance? It offers protection to home and the items inside it in cases of theft, fire, or other calamities. In some cases, the protection is also offered if the damage is due to owner’s mistake or negligence. If you do not own the home but are renting instead, you should inquire about renter’s insurance that offers similar protection.
8. Business Interruption Insurance
This business insurance is vital for every business due to the possible interruption of business operations due to the absence of staff. This usually happens in the event that a natural or man-made disaster occurs, or if employees go on a strike. A prime example of it is the recent Kerala floods that cost about 40,000 crore loss. This insurance is vital for physical, brick-and-mortar businesses. It compensates the business for loss of income due to business interruption.
9. Life Insurance
Believe it or not, life insurance and business insurance are interrelated. If a business owner has this insurance, it will ensure that the business doesn’t suffer financially due to the accidental death of the person as the family would get financial support from the insurers. Similarly, if an employee dies, the company will not need to take care of the family if there is life insurance compensation available to the employee’s family.
10. Worker’s Compensation
This business insurance offers compensation to employees who are injured on the job. It is beneficial for business because when an employee avails it, he or she gives up the right to sue the business owners. Hence, the business is saved from getting dragged into legal matters, and its reputation stays intact. The recent deaths of sanitation workers in India have once again highlighted the need for this type of insurance.
11. Directors and Officers Insurance
This policy protects the officers and directors of a company in cases where their actions have affected the operations or profitability of a company. This insurance covers the cost of damages done and the costs associated with fighting a legal case. The need for this insurance was highlighted when Shivinder Singh of Fortis group sued his brother Malvinder Singh for the systematic undermining of company’s and shareholder’s interests.
12. Insurance Against Data Breach
This business insurance is needed by an organisation where data is an asset, and its protection has a lot of importance. A prime example could be the IT industry where if the data is compromised, the customer information might be stolen and used for scrupulous purposes. A startup, EarlySalary, recently became a victim of data breach and names and mobile numbers of potential customers compromised.
13. Personal Umbrella Insurance
The Personal Umbrella Insurance is often sought when liability and other policies are exhausted, and your business needs some additional coverage. This insurance acts as an extension to an existing insurance policy, and its coverage goes beyond the limits of that policy.
It can be seen that every business, no matter how big or small needs to have the necessary business insurances for protection. The type and the coverage you need depends on the needs of your business and its nature. For instance, an IT company cannot do without insurance that offers protection against data breach. In contrast, a travel agency cannot do without commercial auto insurance. So, assess the needs of your business and then buy the insurance that suits your business needs.
Start the process of finding the right business insurance by contacting a service provider that designs custom solutions for you. You should be able to design an insurance plan, pick sum insured limits and get insurance over a wide range.