What is business insurance and what does it cover?
As the name suggests, the primary function of business insurance is to safeguard and protect your business! Business insurance protects your business and employees in the event of an unforeseen circumstance, accident or event.
There are a number of business insurance solutions available for business owners to protect their businesses and mitigate the risks arising from lawsuits, property damage, theft and work-related injury or illnesses. Business protection insurance helps safeguard the financial assets and protect the balance sheets, tangible assets such as furniture, building and stock, as well as intangible assets such as intellectual property or customer data.
Without comprehensive business protection insurance, the financial impact arising from an unforeseen claim event could have an adverse impact on the short-term cash flow of the company and cripple a business. Managing and transferring the unforeseen business risk to an insurer enables businesses to have a peace of mind, to focus on increasing profitability and employee productivity.
What About Insurance Requirements For Small Businesses (SMEs)?
Both individuals and company face the risk of losses. The legal liabilities may arise from statute, Common Law or contract as insurance requirements for small business:
A small business may be faced with insurance requirements imposed by a landlord, in the form of a tenancy agreement, as well as principals or clients;
- Employers and companies have a legal liability towards their employees for injuries sustained, diseases contracted, as well as death at the workplace by virtue of the Work Injury Compensation Act (Cap. 354). This is an example of a legal liability arising from statute common law.
- Client’s insurance requirement, with a contract for a project or service agreement, is more and more a legal liability arising from contract agreement between company and clients in terms of General liability especially with Professional Indemnity.
- Insurance tenancy agreement also become almost a common requirement between Landlord and the tenant especially in term of public liability, property insurance and contents.
A broker that is reactive in providing support to navigate these requirements is essential in order to ensure that the business is in compliance with all requirements at all times.
To face these different liabilities, level and source of requirement, there are existing compulsory business insurance packages and SME insurance packages proposed by the insurance market.
Based on various factors such as the business activity, sector type, revenue size, geographical location(s), we are able to use a combination of pre-underwritten as well as customized solutions available in the insurance markets in order to design an insurance portfolio that best fits your current requirements for the business.
What Are The Compulsory Business Insurance Packages?
With a vast amount of resources available on the market, it may be challenging to identify the essential coverage your business needs.
There are several classes of business insurance that every business should have. We may categorise them into following four groups:
- Workers’ Compensation Insurance
All persons contracted under the payroll of a Singapore registered entity is bound by the Work Injury Compensation Act (WICA). In the event of a Work-Related Injury or Occupational Illness, the employer is required by law to reimburse the medical expenses, as well as pay medical leave wages to the affected employee. In addition, in the event of temporary or permanent incapacity, the affected employee is entitled to a lump sum compensation.
The employee may choose not to accept the compensation and sue the employer under the common law.
The Workers’ Compensation Insurance will cover for the medical expenses, loss of income, lump sum disability compensation as well as the legal liability claim filed by employees against your business.
- General Liability Insurance
- Public Liability or also commonly known as the General liability: Indemnity against Injuries to 3rd party persons or damage to 3rd party property as a result of your business activity/the product you manufacture
- Directors’ & Officers Liability Insurance: to cover all directors and the company against financial consequences arising from alleged misconduct or a wrongful act executed in the position of director.
- Professional Indemnity Insurance: To indemnify against Professional Breach – arising from negligence, errors or omissions of qualified professional representing your business. This is a primary risk exposure for businesses involved in professional services – Fintech, Traditional Financial Services such as Asset & Fund Management, M&A, Compliance & Audit, Accountancy, Law, Aviation, Pharmaceutical and Medical Industry etc.
- Property Insurance
Property insurance covers the losses or damage to a company’s property – within and out of the premises as well as the physical assets. We can insure for an All Risks’ Event on the Insured’s Premises – in which, the policy will trigger in the event of damage due to fire and lightning, flood, burglary, water damage etc. The policy will cover for the costs to repair the structure of the building you own / the renovation costs if you’re a tenant, as well as contents, machinery, stock and electronic equipment in the premises.
We are also able to insure physical property outside of a fixed premise – such as stock in a 3rd party warehouse, as well as portable electronic equipment such as laptops from accidental damage as well as total loss having exercised a reasonable amount of care and diligence, whilst working remotely, anywhere in the world.
- Employee Health Insurance
Insuring your employees can offer monetary protection in the form of medical leave if they incur any injuries or fall ill during work. Many companies are also incorporating wellness-focused programs and initiatives as a value add-on to employee health insurance plans. Doing so will lead to employees feeling valued and secure within the company.
Finding the Right Business Insurance and Employee Health Insurance Plans
A business should conduct a regular review of these insurance plans, in order to scale along with the growth and evolution of the business, as well as to adapt to the everchanging global landscape. Emerging risk and threats such as cyber-attacks and hackings has resulted in changes in regulations such as the implementation of data privacy framework and laws by governments. Insurance plans have also evolved; companies are adapting by using cyber insurance in order to mitigate the losses and respond to a cyberattack on the business when and if it does happen.
Buying and reviewing your business and employee health insurance plans are pivotal for a number of reasons, with attracting and retaining talent as well as improving company culture being notable reasons. With the range of personalised and flexible business insurance packages available on the market, liaising with us can help you make an informed decision.
Running a business is a risk in itself. There are ways to offset costs and continue providing stellar business insurance and employee health insurance options without baring the business and employees to various risks.
Own a small business? If you would like to get started on finding the right Business insurance or SME insurance packages available for you, drop us an email today.