7 Best Small Business Insurance Covers You Should Consider

1. General Liability Insurance Cover:

The policy is offered to the business and provides them cover for the compensation that is required to be paid and the expenses incurred in the legal defence of the business. The insurance coverage differs from policy to policy and depends upon the type of cover bought at the time of purchasing the policy, but generally, the Comprehensive General Liability Insurance Policy provides the below coverage:

• Third-party bodily injury and loss or damage to the third-party property in any unexpected circumstances

• Any personal injury caused by the business while a third party is in and around the premises

• Advertising injuries, such as trademark breach

• Invasion of privacy

• Any loss caused to the third party due to usage of the insured business's product

• Any loss or damage occurred to the third party due to fire during the business operation hours

• Depending upon the policy you purchase, the compensation is provided not only to bodily injuries but also to mental injuries, humiliation, shock, etc., resulting from the physical injury

2. Professional Indemnity Insurance Cover:

Professional Indemnity Insurance Cover is typically offered to the organisations that provide consultation or any other professional service to their clients. Financial advisors, healthcare professionals, accountants, architects, etc., are some of the examples of professional service providers who may need a Professional Indemnity Insurance Cover. This cover can protect the business if it is sued by its clients for their services or advice that caused financial loss to them. These claims could be a result of malpractices, errors, negligence, misrepresentation, etc. The policy provides insurance coverage on the basis of claims made.

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3. Employees' State Insurance Scheme:

The Employees' State Insurance Scheme is a multi-dimensional Social Security Scheme tailored to provide socio-economic protection to the employees in the organised sector against the events of sickness, maternity, disablement, and death due to employment injury and to provide medical care to the insured employees and their families.

The scheme aims to provide full medical care to the employees registered under the ESI Act, 1948 during their incapacity, restoration of their health and working capacity. It provides financial assistance to compensate for the loss of wages during the period of employees' abstention from work due to sickness, maternity, and employment injury. The scheme also provides medical care to the employees' family members.

The scheme covers all the factories in India where 10 or more persons are employed. Moreover, it also covers shops, hotels/restaurants, cinemas, road motor transport establishments, newspaper establishments, private educational institutions, medical institutions, and other organisations employing 10 or more persons. The employee within the threshold limit of wages, i.e., up to or equal to Rs 21,000 per month, is eligible for the ESIC scheme. It is the employer's duty to cover the eligible employees in the programme. Click here to read more about the scheme.

4. Commercial Vehicle Insurance Cover:

If your business owns one or more vehicles that are used for business purposes, it is necessary to financially protect them and your business from any loss or damage that occurred to the vehicle and by the vehicle.

A Commercial Vehicle Insurance is a type of motor insurance that covers the damages and losses caused to and by a commercial vehicle and the persons involved (owner, driver, etc.). It covers losses and damages that occurred due to accidents, natural calamities, fires, etc. The insurance is mandatory by the government for businesses that mainly involve the use of commercial vehicles, such as school buses, tractors, auto-rickshaws, cabs, trucks, vans, etc.

As you might be aware, most Term Plans offer easy payment options. You can pay the premiums monthly, yearly, half-yearly, or quarterly at your convenience. Not just that, but many insurers offer the option to choose your paying term. So, if you want to buy a Term Plan with a tenure of 20 years but are not sure of your financial condition after 10 years, you can choose to pay the premium only for 10 years. Undoubtedly, the premium you pay in the premium paying term of the first 10 years will be high as you will not be paying any premium for the next 10 years. This option is suitable for people who are going to retire after a certain age and want to pay only until they have a fixed income but need life cover even after retirement.

5. Product Liability Insurance Cover:

As a manufacturer or trader, you can get sued by the clients if your products cause or can cause any bodily injury or property damage. The lawsuits arising from the losses or damages caused to the third-party or third-party property due to the consumption or use of the product sold/distributed could be very complicated and expensive. However, having a Product Liability Insurance Policy will ensure all such lawsuits are covered by the insurer that otherwise, you would be liable to pay.

6. Business Interruption Insurance Cover:

Business Interruption Insurance Policy, as the name suggests, helps protect your business financially in case you are forced to shut down your business due to an expected problem that is covered by the policy. For example, say you have an electronics store which gets damaged by a fire. In such a case, you will not be able to serve the customers and have to close the shop until it gets repaired and the new goods come in. However, during this period, you will have to bear certain expenses like shop rent, workers' salary, electricity bills, lost revenue, taxes, EMIs, etc., which can be covered by the Business Interruption Insurance Policy.

7. Commercial Property Cover:

Your business is indirectly constantly exposed to the risk of theft, natural calamities, fire, etc. A Commercial Property Insurance Policy financially covers the structure of your commercial property and its contents from all the natural and man-made calamities covered under the policy. It provides financial coverage against any damages and losses that occurred due to natural fire or allied perils caused by lightning, rain, storms, flood, cyclones, hurricanes, rockslides, landslides, etc. Apart from the natural calamities, it covers losses and damages that occurred due to man-made anti-social activities like strikes, riots, etc., and any kind of accidental loss or damage, such as damage caused by a vehicle, missile testing, overflowing of a water tank, etc., except intentional damage and accident that you might cause with your vehicle.

To Conclude:

Any kind of lawsuit, damages, or losses could be financially devastating for small businesses. Therefore, it is crucial to analyse your insurance needs and opt for the business insurance covers that are essential for your business to be financially prepared for any uncertainties. If you are unsure of your insurance needs, reach out to an insurance agent or distributor who will help you analyse your needs and guide you to buy the right coverages. However, to make sure you get the maximum coverage at an affordable premium, it is advisable to do your research by comparing different policies based on different parameters such as insurance cover, premium, claim settlement ratio, claim process, customer reviews, etc.

Warm Regards,
Ketki Jadhav
Content Writer