Which Business Insurance Do You Need? A Guide from RiskBirbal Insurance Brokers

All businesses will face risks. Your stock could be damaged due to fire. Claims could be made. Or you could have a sudden outage, leaving you without income but still facing costs. Business Insurance can help to mitigate financial risks. At RiskBirbal Insurance Brokers we can help business owners understand the risks they face, and compare options from insurers. The type of business you have will affect the type of cover you require. This will depend on the size, industry, assets, staff and day-to-day activities. Most companies will take out property, liability and interruption insurance to start with, and then build from there.

Why do I need Business Insurance?

There are many reasons why you could face a loss. Your property may be damaged through fire, theft or natural disaster. Claims may be made by third parties for injuries or damage. Employees could suffer injuries or illness. Or you could have an outage due to a covered event. Business Insurance can help with losses you experience, however it will depend on what is covered. This will depend on the wording, exclusions, limits and conditions of the policy. Often as brokers we see businesses looking at their risks after they’ve had a loss. It is better to look at your risks before taking any policies.

Also Check: Marine Insurance

What Business Insurance do I need?

Most businesses will require a combination of covers. The right combination will depend on what you own, operate and deal with.

Property Insurance

Property Insurance for Businesses is to protect your assets including your building, equipment, stock, furniture and machinery. The sum insured should reflect the true value of your assets. If you insure your stock/machinery for less than the true value, you could receive less on a claim. There are standard property policies for small and medium units in India from IRDAI. These policies help to standardise wording for many SMEs. Business Insurance to Protect Company Assets should start with the correct list of assets. Commercial Property Insurance for Businesses may also include specific covers.

Liability Insurance

Liability Insurance is for claims made by third parties. This could be injuries to visitors, damage to another’s property or a defined legal liability. Common types of liability are general, product and professional. This could be if a customer slips in your shop, products cause harm or a client claims they have suffered a financial loss due to professional advice. A liability policy may help with claims, however it will depend on if it is covered. This will depend on the wording of your policy.

Business Interruption Insurance

Business Interruption Insurance can help with income loss and certain expenses if you have an outage due to a covered event. This is often taken out alongside property insurance. If you have a fire and damage to machinery, you may not be able to trade for a few weeks. However you may still have to pay rent and salaries. This cover can help with any losses you experience. This will depend on the wording of your policy.

Small Business Insurance

This is not a single product. Usually it refers to a package. A retail shop may require stock, burglary and public liability. A small consultancy may require professional indemnity. A small manufacturer may require machinery and stock. Cost can be an issue, however you should not simply choose the cheapest option. You should ensure you have the right cover to protect you from the most impactful risks.

Commercial Insurance

The type of insurance you require will depend on your industry. Manufacturing companies may require Machinery Breakdown, Stock and Product Liability cover. Retailers may require Stock, Premises and Customer Claims cover. Traders may need Marine Insurance. Construction companies may require Contractors All Risks. Offices and service businesses may require Professional Indemnity and General Liability. An insurance broker can help you compare the right covers.

Choosing the right Business Insurance

A good Business Insurance starts with understanding your risks. Business Insurance Coverage for Companies should reflect your true exposure.

·         List the main risks in your business.

·         Look at your building, machinery, stock, equipment and other assets.

·         Consider any risks to your staff.

·         Check the limits, exclusions, excess and conditions.

·         Review previous policies to check for gaps.

·         Compare suitable options.

For example a trader may insure their stock for the value it was purchased for. Due to inflation the price may have increased. If there is a fire, they may not get enough to replace their stock. It is a good idea to review the value of your assets.

How can a Business Insurance Broker help?

A Business Insurance Broker will work for you. They can help you understand your risks and what may and may not be covered. They can also help you compare suitable options. An Insurance Broker can help you choose the right Business Insurance. They will ask questions relating to your business, assets, staff and claims. They will then explain what is covered, the limits, exclusions and claims process. RiskBirbal Insurance Brokers are licensed by IRDAI. We are not an insurance company. We can help businesses find solutions to fit their needs. We cannot guarantee you will receive a claim or save money. This is all decided by the insurer.

Common mistakes

·         Picking the cheapest option.

·         Under-insuring your assets.

·         Ignoring exclusions and conditions.

·         Not reviewing your risks.

·         Failing to update your policy.

·         If you have new machinery, location or products your risks will change. You should review your policy.

Conclusion

The correct Business Insurance can help companies of all sizes. Be sure to review your risks, understand the wording of your policy and carefully compare options. Contact us if you would like to discuss your needs.

FAQs

What is Business Insurance?

Business Insurance is a policy which can help with defined financial losses. What is covered will depend on the policy.

What Business Insurance do I need?

It will depend on your industry, assets, staff and liabilities. Most businesses will look at property, liability and interruption cover to start with.

What Business Insurance is available in India?

Common options are Property, Liability, Interruption, Marine, Engineering and Package policies for small businesses. The wording will vary between insurers.

Is Small Business Insurance necessary?

It is not mandatory for all businesses however can help with risks such as fire, theft and third party claims.

What is the difference between Property and Liability Insurance?

Property insurance covers your assets. Liability insurance covers claims made by third parties.

Does Business Interruption cover income loss?

It can help with income loss however it will depend on the policy limits and conditions.

How can a Business Insurance Broker help me?

They can help you understand your risks, what is covered, compare options and understand exclusions and claims. There is no one ‘best’ Business Insurance for Small Businesses. It will depend on your risks and policy wording.