To ensure growth, every business in the 21st century needs to subscribe to general and commercial insurance. Some types of insurance cover may be expensive but the important question to ask is “can I afford not to have insurance?” rather than “can I afford insurance?”
You can protect your business against lawsuits and the loss or damage of data or physical assets with the use of insurance, enabling the growth of your business in the long term.
The cost of business insurance depends on two factors namely:
The size of payment the insurer may have to make in the event of a claim; and
The likelihood of the business making an insurance claim.
Here are 3 types of insurance covers available to businesses.
1. Commercial property insurance: Every business with property needs to have an insurance policy that will cover for damage from varied causes, including protecting the business premises and buildings from certain risks. If you require this type of insurance to cover the needs of your own business, the things you can expect to be covered will include floods, storm damage, lightning and fire, riot protection, and the destruction of property, to name a few.
However, it is important to note that property insurance policies typically do not cover mechanical or electrical breakdown, “wear and tear”, or any policy-specified property deterioration.
2. Business contents insurance: Machinery, stock, and contents need to be insured separately since property insurance only covers the physical business building. While getting business contents insurance, there is a choice of indemnity insurance or a replacement as new insurance.
Indemnity insurance: This is the type of insurance many working professionals will choose to protect themselves in the event of some type of human error affecting the output of their work. Indemnity insurance deducts the cost of a project that might have gone wrong due to a mistake being made on the part of the person who was hired to complete a particular task.
We can be prepared to undertake any kind of job, but mistakes will always happen at one point in the process, which makes some kind of indemnity insurance all the more vital for a hard-working professional. Businesses can choose a business interruption policy which insures against loss of profit and the higher overheads incurred as a result of a loss.
3. Cyber insurance
Cyber risk insurance covers the damage or loss of information from IT networks and systems. This insurance is important where reputational damage and regulatory enforcement are concerned.
Cyber risks are covered by first-party insurance cover and third-party insurance cover. The former covers the assets of the business while the latter covers the assets of the customers.
Insurance needs differ from business to business. You could seek advice from regulated insurance brokers or insurance companies in the UK, to find the insurance covers that are suitable for your business. The Financial Conduct Authority (FCA) regulates insurance advisers, brokers, and other insurance intermediaries. A good insurance adviser should have FCA authorisation.