Life insurance, health insurance, property insurance for our homes, and even car insurance. All these sound familiar right? Yes, they do. We all have secured insurance in different categories.
However, when you meet a businessman or woman and you ask if they have business insurance, they tend to look at you strangely. Some believe it is not important while others tell you they don’t think their business is large enough to warrant being insured.
I must tell you that business insurance or commercial insurance is very much as important as your health insurance or any other type of insurance. In short, professional business coaches will tell you that paying for business insurance should never be seen as a wasteful expense but rather it should be seen as an investment.
I always hear entrepreneurs complain when I advise them to insure their business. They say things like, “I don’t know how it works”, ” I don’t have a staff who can properly guide me through the registration “, or ” I don’t know how insurance payments work”. Well, the good thing is that you don’t have to be an insurance guru to register your business for insurance. All you need is a good insurance company.
6 Types of Business Insurance for Businesses
If you are wondering what type of insurance is best for your business, your staff, and also your customers. Let me explain the types of business insurance and how they can be distinguished.
1. Workman’s compensation insurance
In addition to a benefit like protecting your business, business insurance also protects your staff. Let’s assume you own a company where people work with heavy machines and it happens that one day, a staff is hurt while on duty. With the right type of insurance policy you have in place such as workman’s compensation, the insurance company will pay for all or part of the damages to the staff which include medical expenses.
2. Business liability insurance
This type of insurance benefits your customers while doing business with you as well as outsiders who come in contact with your business and are affected. I do advise all companies to have this because mistakes do happen. If you own a restaurant and customers fall sick after eating your meals either in your restaurant or they happen to order the meals through your online platforms, let us say due to an allergy to one of the ingredients you used in your meal. The insurance company handles the cost of damage.
I have heard of instances when electric vehicles start to burn or malfunction due to overheating of the batteries. The vehicle manufacturers will find themselves in a really hot position without a business liability insurance policy put in place.
3. Fire Hazard Insurance
Hazard insurance protects your business in the advent of any fire damage eventualities that destroy assets in your office. God forbid there was a fire outbreak at your office overnight that you only happen to discover the following morning. There will be valuable things that might be destroyed such as office equipment like computers, printers, and furniture. Not to talk of files and documents and if there happens to be a safe in the office with cash in it, it means all the money is gone as well.
4. Unemployment insurance
No job is secure. There are times a company wishes to reduce the number of staff due to different reasons such as bad sales, national recession, or change in company policy. When these staff are asked to leave, unemployment insurance helps them survive for some time till they get new jobs. That way, those laid-off staff are happy and the company is also happy, right?
5. Cyber insurance
Businesses now have online platforms such as a website where customers can order products by just using their credit or debit cards. Your business also needs to go online in this 21st century. No matter how much you make through walk-in purchases, you will be losing out on the benefits of having your business go online and global if you neglect the power of the internet. However, I can tell you from first-hand knowledge that businesses are now open to different attacks on websites and servers such as eCommerce. It is on the computer systems or servers where you store customer data such as home address, gender, age, phone numbers, and bank account details. A cyber insurance policy protects your business after a cyber attack that affects your customers.
6. Commercial Auto insurance
Logistics is important to the progress of any business. With a good road communication route, you can still conduct business and go to regions where you don’t even have an office branch. Now remember that accidents do happen on the road no matter how careful your drivers might be. You need an auto insurance policy to protect your company from potential losses resulting from accidents.
Importance of Business Insurance
According to research carried out, just 49% of businesses in the United States are insured. That is followed by about 35% in Europe. In Asia, only 12% are insured. It even gets worse in Africa as only 8% of businesses are insured and funny enough, the research carried out by HighJobLink Limited revealed that most business owners in a country like Nigeria don’t even know that there is anything like business insurance much to talk about of knowing the benefits. Also, even those who are aware of business insurance are not interested as they claim they don’t see the benefit and how it can help their businesses grow. But the benefits of business insurance cannot be over-emphasized. Some of these benefits are:
1. Enhancement of Credit score. Your business can access loans by betting on their insurance policy as collateral against a loan.
2. Commercial Insurance protects your company from potential losses resulting from accidents.
3. An insurance policy protects your business after a cyber attack that affects your customers.
4. Insurance protects your business in the advent of any fire damage that affects assets in your office.
5. Business survival. Most businesses crash at the death of the owner, but with insurance, new management can continue the business as the insurance benefit can be passed down with the same company.
Frequently Asked Questions
Can I get business insurance from traditional insurance companies?
Yes. Most of the insurance companies that offer any other type of insurance also insure businesses. And the best part of it is that none regardless of who the future management of the company will be, this insurance benefit also passes to them. Thanks to this the brand is always safe.
Will business insurance protect a business from the loss of natural disasters?
Things natural disasters or even the effects of climate change are enough to encourage you to seek business insurance. This is where insurance companies come in, they pay for all or part of the damages. It is usually safe for you as a business owner to prepare for any unforeseen eventualities.
Will business insurance benefit farmers in the agricultural business?
Yes. If your business falls within the agricultural or farming industrial niche, you must have felt the effect of climate change. No one can control the weather, there are times even when forecasts by government weather agencies fail. You wake up one morning and go to your farm only to discover that the little rain the weather agencies had earlier predicted would be a minor shower did not turn out to be so.
Is the business insurance price worth it?
Yes. Business insurance is the greatest investment you can bet part of your profit on. This is because it does not just guarantee the present but the future safety of your brand and business.
