Running a business can be likened to rowing a boat. As a ‘business sailor,’ fixing your position relative to the North Star does not necessarily keep water off the business’ boat. As you sail across the unpredictable waters of entrepreneurship, you face several internal and external mishaps which can cause the boat to sink or swim.
An employee, a client, or a passerby could get injured; a client could be sued for breach of contract, a natural disaster could bring your business operations to a halt; among a plethora of other unforeseen events. Thanks to the various types of business insurance, you can hedge against various potential risks facing your enterprise.
What is the importance of insurance to your business?
The leading reason as to why many businesses consider investing in various insurance packages is to avoid loss of assets when faced with either internal or external mishaps. However, business insurance packages are not all about asset protection. They come with other benefits, including:
Every employer is tasked with the responsibility of ensuring employee well-being in the event of an accident, sickness, disability, and even old age. Such duties are seamlessly met through insurance packages that cover accidents, illness, and pension benefits.
A business owners insurance package such as Personal Business Property ensures business continuity when an enterprise is hit by calamities that could lead to the closure of operations due to massive losses incurred. Such policies provide adequate funding required to restore the destroyed business assets and revamp the business operations back to normalcy.
Insurance improves an enterprise’s ability to take on debt as it can serve as a risk mitigation mechanism. When obtaining a loan, a business can pledge the policy as collateral, thus guaranteeing the lenders that they will be paid when a disaster arises.
When business owners are guaranteed reimbursements when faced with adversities, they operate free of worries associated with losses. They can, therefore, devote much of their time to their business operations. Thus ensuring efficiency that leads to profitability.
Key person indemnification
A key-person is someone whose contribution to the business, if withdrawn, will significantly hurt business operations that boil down to profits. An insurance policy can compensate for the losses suffered when a business loses a key member of the company.
What are the types of business insurance packages?
They are many types of business insurance packages, customized to meet your specific business needs based on the kind of enterprise you run. The existing policies can be broadly categorized into:
- Business liability insurance: This type of policy covers any parties that may be harmed by your business activities such as customers who have experienced product malfunction or bystanders harmed by your business operations.
- Worker’s insurance: They cover worker’s welfare that includes medical treatment, disability benefits, death benefits, wrongful termination, and much more.
- Business interruption insurance: If a property is damaged, or a disaster occurs, business operation is likely to be brought to a halt. Business interruption insurance compensates enterprises from the occurrence of such events.
Finally, it is essential to note that some types of insurance packages, such as worker’s insurance, are mandatory business requirements set by the government.