The Journal of IDCRO, a dentistry-related online magazine’s research, revealed that more than 50% of dental practitioners were not aware of the Professional Indemnity Insurance, 20% felt that it was not mandatory and 9.5% did not feel there was a need to purchase the insurance. The research concluded that there was a severe lack of awareness about this insurance despite rising cases of claims against dentists by patients.
This is just one example of a disturbing lack of awareness about the need and the importance of insurance for small businesses and individual professionals.
There are numerous ways in which insurance can help protect and cover businesses, which business owners may fail to consider. This article will detail a few of the many reasons why your company needs tailormade business insurances.
1. You want to be able to deal with uncertainties
Your assets such as the office space, vehicle, inventory are indispensable and extremely valuable to the success of your business. However, natural disasters, machinery breakdown, burglary, or lawsuits arising out of negligence, are risks that cannot be ascertained and have the potential to cripple your business. Hence, it only makes sense to protect these precious assets.
Thus it’s essential for any company to have business insurance that can cover these losses. Large corporations can face lawsuits running into millions. SMEs might not be able to sustain the crushing financial losses that arise in fighting out legal battles or out-of-court settlements. Individual professionals and consultants, too, could face the risk of legal suits. Thus, opting for suitable business insurance, that serves as an umbrella to cover all kinds of company assets, is a wise decision for every kind of business.
In a nutshell, it would be okay to say that risks and dangers are always growing. Global warming has made natural calamities a more frequent occurrence. Your office premises may be physically protected but your business data faces the risk of cyber attacks What would happen if your customers file a lawsuit against you for losing their personal data to a cyber attack?, Would you have the financial resources to help your business stay afloat in such a scenario? This is where business insurance can help you live another day.
2. You want to get all aspects of your business covered
Every business is made of various components – employees, electronic assets, raw material, inventory, vendors, customers, third parties, and more. Events and happenings may affect any or all aspects of the business. This brings us to business insurance. Insurance cannot reduce the incidents of risk but it can be a financial tool to protect against expenses and losses.
The kind of insurance a business may need depends on the industry it operates in and the nature of the business. For example, a fintech company would require Cyber Risk Liability Insurance, whereas an SME that is into manufacturing clothes may not need it, if none of its business activities are online. Commercial General Liability, Professional Indemnity Insurance, and Directors & Officers Liability Insurance are among the most prevalent insurance plans in India and cover a whole range of business liabilities.
Business owners need to give a deep thought as to which are the areas of their business that require the purchase of business insurance plans. From the office building to equipment to inventory to business reputation – when one plans an insurance portfolio, there are many complex decisions and components to be considered.
3. You want to ensure your business is up and running after a loss
A bustling café had to shut down due to an outbreak of a disease caused by the eggs that were being served in the café. However, Business Interruption Insurance covered all their losses and expenses – staff salaries, vendor payments, and losses.
Businesses are akin to a pack of cards. Building a business involves a lot of effort, time and monetary investments but the slightest error or negligence can bring the whole edifice crashing down. And if you don’t have the right insurance policies to protect you, you could be in for a severe heartache. Most businesses collapse in the event of not having insurances policies at the time of unexpected distress.
4. You want to protect yourself and others, too
Apart from protecting yourself, it is important for you, as a business owner, to have insurances that protect the key stakeholders – customers, employees, vendors, and investors, among others. One of the most important insurances for a business is the Commercial General Liability Insurance (CGL) that protects enterprises. It covers major claims that any business may face:
- Bodily injury and property damage
- Personal and advertising injury
- Medical expense payment
Moreover, there is a difference between the liabilities of the business and its owners. A business has limited liabilities, whereas the business owners or directors have additional liabilities.
5. You want to enhance business credibility, attract talented employees
Employees are an asset for a business. A business also has liabilities towards its employees. Employers may have to face losses and expenses related to employees. A legal case filed against the employer by the employee on the grounds of discrimination, an employee getting injured in the course of performing a business activity or an employee being sued by a third party. These are some of the ways in which a business is liable to its employees’ protection in times of risks.
Group Health Insurance, Workers Compensation, Professional Indemnity and Directors & Officers Liability Insurance are some of the most prevalent types of insurances that businesses should purchase to protect their employees.
Here’s an example: Company X was on the lookout for a new CEO. Most candidates that were pursued declined the offer on the grounds that the company did not have a Directors & Owners Liability Insurance policy. It’s possible. Insurances improve recruitment opportunities for director-level roles and also promote higher retention. Some industries could be more vulnerable to legal risks towards its directors. Thus these types of insurances are essential for companies to procure in order to recruit and retain strong leaders, directors and decision makers.
6. You want to expand your business
As a business grows, so does its needs. Having a strong and comprehensive business insurance portfolio can help the owners and directors take important decisions while not having to worry too much about the personal and business legal ramifications. Expanding business requires confidence. Insurances provide a fair bit of confidence.
In the current landscape of startups and entrepreneurial initiatives, business owners have an increasing urge to expand their footprint across the country, and in some cases, globally. International markets bring with them, new risks, challenges, new rules and regulations, which if not followed to the tee, might leave businesses vulnerable to legal risks. Certain sectors such as IT, knowledge-based sectors, outsource-related industries, and individual consultants such as doctors, architects, brokers, and business consultants, among others, should definitely have insurances in place to be able to expand their business to new shores.
7. You want to improve your business credibility
Insurance policies could help in improving business credibility and reputation, and instill trust in customers and new partners. Companies that face legal charges could face a lot of problems such as interruption in daily business activity, loss of productivity or low morale of employees, among others. Having the right business insurance policies would ease the company’s stress and burden, allowing it to function smoothly.
Having the right kind of business insurance policies could also help in creating confidence and trust in customers, in turn, leading to higher revenue. For companies that aspire to expand its business in the foreign markets, having business insurance can ensure it is prepared for new kinds of risks, rules and regulations. Having business insurance would instill confidence in new partners and collaborations, especially when expanding to new geographies and markets. Those companies that aspire to expand their business should seek guidance from professional insurance companies that can offer the right insurance solutions.
To sum it up
Business insurance can leave you confused, with the many factors that need to be understood before making a decision. This is why it is important to get business insurance advice from competent insurance companies who can aid you.
PlanCover can address your concerns and queries with unbiased solutions that would benefit your business. Moreover, PlanCover’s approach of transparency at every stage of the policy’s life cycle ensures that you know what’s happening with your policy. For more details visit our website.