Every type of business, whether large-scale or small-scale, may sometimes bear losses. Losses bring forth liabilities that can affect a business severely. It might be difficult for them to withstand the losses if it is a small scale business.
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Opting for essential insurance policies can help a small scale business owner stay protected in any financial crisis. This article discusses seven much-needed insurance policies that can protect small business organizations financially.
What are the 7 key types of insurance every small scale business owner should have?
Several insurance policies help keep business organizations during any unforeseen financial crisis. Here are the top seven insurances that one can opt for:
General Liability Insurance Cover
General liability insurance covers a business against any kind of legal liability caused due to property damage, reputational harm, bodily injuries, advertising injuries, etc., caused due to the business operations. For instance, if a customer gets injured at the business place or an employee damages the customer’s products while delivering them, GL insurance will cover it.
Professional Indemnity Insurance Cover
Professionals such as financial advisors, health care professionals, real estate agents, etc., must insure their business against professional indemnity cover. If the professionals are sued for professional negligence, errors or omissions, etc., PI insurance can be a saviour. However, this insurance policy does not cover any breach of professional duty.
Employees’ State Insurance Scheme
According to the Employee’s State Insurance Act 1948, the ESI scheme provides financial coverage to employees against sickness, death, and disablement caused due to injuries at work, etc.
Moreover, it provides medical coverage to the insured person and his/her family. Factories and organizations employing 10 or more people must insure their employees against this scheme. However, employees earning 15,000/- to 21,000/- per month are only eligible for this insurance scheme.
Commercial Vehicle Insurance Cover
Any damages or losses caused to a commercial vehicle or its owner-driver due to collisions, accidents, natural hazards, etc., are covered under commercial vehicle insurance.
Passenger vehicles, goods vehicles, or any particular vehicle involved in construction, farming, etc., can be insured by this policy. As per the Motor Vehicles Act 1988, it is mandatory for every commercial vehicle owner to insure their vehicle with this insurance policy.
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Product Liability Insurance Cover
Product liability insurance can safeguard an organization that manufactures commodities for sale. A manufacturer may face legal hazards under certain circumstances despite employing the best practices while manufacturing a product.
This insurance policy covers the organization against claims of losses and damages caused due to the consumption or usage of its products. However, the coverage provided is explicitly tailored for specific products.
Workmen Compensation Insurance
Responsible business organizations should insure their employees against injuries, damages, etc., caused while performing their job. According to the Workmen’s Compensation Insurance Act of 1932, workmen compensation insurance safeguards employees against death, disability, medical liabilities, etc., and protects the organization financially.
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Commercial Property Cover
A commercial property cover safeguards a business financially from losses and damages caused due to natural calamities, theft, fire, etc. Despite the necessary precautions, commercial properties remain exposed to floods, cyclones, storms, landslides, manmade calamities, etc. This insurance policy will offer financial protection to help bear the incurred losses.
Despite maximum precautions, jobs and businesses come with some associated risks. So, responsible business organizations should protect themselves and their employees against losses and damages. The insurance as mentioned earlier policies will provide maximum benefits to the employees and the employers during unfortunate incidents.