Whether you plan to start or already run a company, you need to understand different types of business insurance to secure your business.
Whether you plan to start or already run a company, you need to understand different types of business insurance to secure your business.
Introduction
As a business owner, it’s crucial to understand the importance of different types of business insurance. Since business involves several risks, an entrepreneur needs to plan something to deal with the uncertainties even before hiring the first employee.
No matter which industry do you belong to, it’s essential to have the right insurance policy to secure your business during uncertainty. A business may fail due to a lawsuit, poor management decision, improper business structure, and unable to pay debts.
Business insurances can help incur losses due to any catastrophic event. So, it’s crucial for business owners to secure their businesses with different types of insurance.
Five Different Types of Business Insurance
According to the insurance authority Dubai, most business owners initially are not aware of the types of insurance available until they meet a disaster. As it’s well said that prevention is better than cure, you should think about your business security from the beginning.
As the name suggests, general liability insurance covers your losses due to normal incidents such as small accidents, claims, injuries, etc. This type of insurance covers your medical expenses, property loss, legal costs, etc.
However, general liability insurance does not cover all your property and valuables. So, you need to have separate property insurance for expensive properties, equipment, and machinery. You should read the terms and conditions of every insurance document before you sign it.
Workers’ compensation insurance is one of the most important business insurance that you need to have in your company. Accidents and injuries can be reduced but cannot be eliminated completely. So, you should have insurance for your employees that will cover medical expenses, loss of wages of the employees when they get injured at the workplace.
Moreover, you should care about the health benefits of your employees as a responsible employer. You can provide general health insurance to your employees that will help them pay their medical bills if they fall sick. It will increase your employee retention rate and attract the best talents.
Do you have a transport business, or are there any commercial vehicles used in your organization? It does not matter whether it’s your fault or someone else hit you; your damages will not be covered if your vehicle doesn't have insurance.
Additionally, it can also be troublesome if anyone files a vehicle accident case in case of serious injury. If you don’t have insurance for your vehicle during a legal inquiry, you will be in trouble. It will be counted as your fault as you have a commercial vehicle without insurance. However, consider these factors before investing in vehicle insurance.
Whether you own your office or have taken it for lease, you should have property insurance. Property insurance not only covers your workspace but also covers your furniture, machinery, equipment due to fire or theft.
Most insurance companies won't cover your losses due to natural disasters like floods, storms, or earthquakes. However, you can check it in the insurance policy terms and conditions if your area is prone to natural calamities.
Are you manufacturing any products? Then, you should secure your product with product liability insurance. No matter what safety measures you take into consideration, you will have to pay a hefty price if anyone files a lawsuit against your product.
Having product liability insurance helps you to handle the situation smoothly because you will cover your legal service expenses and business losses. On the other hand, you may not be able to restart your business if there is no insurance coverage for your product.
The Bottom Line
The above business insurance is the most common and essential business insurance. There are other insurances such as home-based business, business interruption insurance, and more. However, you shouldn’t go with all the options; you need to select suitable policies according to your business needs. Lastly, please share which type of policy will suit your business in the comments section.
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