Running a business is no easy feat. On top of managing staff and ensuring you maintain a healthy turnover, you also have to be aware of the potential risks your business can face. Unforeseen incidents can be disruptive and costly for your business, whether it’s a cyber phishing attack, allegations of discriminatory hiring practices or workplace injuries arising from negligence.
This is why it’s imperative that businesses seriously consider business insurance to protect their organisation and assets. No matter the size of your organisation, whether you’re a start-up or a large international entity, business insurance can offer a safety net against potential risks. In this article, we cover the different types of business insurance and how each serves to protect your organisation.
What is business insurance?
Business insurance protects businesses against loss due to certain events such as fire, theft, natural disasters, etc. Businesses cannot afford to lose their inventory, equipment, or records, so having insurance ensures that these assets are protected. Business insurance also provides coverage for legal fees and court costs associated with lawsuits filed against a business. Additionally, business insurance covers the cost of rebuilding or repairing damaged property caused by an event covered under the policy.
What are the different types of business insurance?
1. Professional Indemnity
No matter how long you or your team have been in the trade, human error is inevitable. While minor mistakes go largely unnoticed, some errors can have severe consequences and can mean a significant financial loss to your business. Professional Indemnity insurance is a type of liability insurance that helps your organisation guard against the financial consequences of negligence, error or omission. It protects businesses against legal claims made by third parties.
Professional indemnity insurance is different from general liability insurance, which only covers accidents caused by the negligence of employees or contractors. By contrast, professional indemnity insurance covers legal claims arising from negligent acts committed by the insured party themselves. It’s important to note that this type of coverage doesn’t cover intentional acts or crimes.
Directors & Officers
Directors and officers of companies assume a large share of responsibility and are accountable to several stakeholders, including investors, board members and employees. When you run a company, you are vulnerable to a host of factors that may not necessarily be under your direct control. You might be wrongfully accused of discrimination, improper management of company finances or negligence of duties.
Directors & Officers Liability insurance protects the head of the company from being embroiled in lawsuits involving wrongful allegations made by employees or customers. It is designed to protect the key decision-makers of the company and cover the legal costs of lawsuits. Typically, D&O policies include indemnification provisions that require the insurer to pay any judgement rendered against the insured.
3. Workers Injury
Work injury compensation insurance plan covers your employees in the event they are injured during the course of their work. Some roles and industries involve a significant amount of manual labour and put employees under physical stress and risk of machinery-related incidents or equipment failures.
The Work Injury Compensation Act (WICA) stipulates that employers cover their employees for workplace accidents. This act covers workers who engage in manual labour and/or earn less than S$2,600. To ensure your workers are protected and receive adequate financial and medical support if they meet with an accident during work, explore work injury compensation plans.
4. Cyber Risk and Data Protection
As organisations transform digitally and more information is stored in the cloud, the risk of cyber-attacks poses an even greater threat. The consequences of such attacks can mean the loss of sensitive personal data and information, financial repercussions and a damaged reputation. Businesses can guard against data breaches by taking steps towards increasing their business security, such as by regularly updating software and maintaining password security.
An important component of assuming a strong cyber posture is getting your organisation protected with cyber risk and data protection insurance. There are two main types of cyber risk and data protection insurance: first-party coverage and third-party coverage. First-party coverage protects you from direct losses. This involves the forensic costs associated with evaluating and containing a cyber breach, data restoration and cyber extortion. Additionally, first-party coverage also provides support against business interruption. Third-party coverage, on the other hand, protects you from liability for damages caused to others.
Protect your business with Expat Insurance
Expat Insurance offers different types of business insurance plans based on your unique needs. While some coverage might be mandatory by law, other types of coverage are optional but do still offer protection against potential financial loss.
Our insurance advisors will help to assess your organisation’s needs and vulnerability gaps and offer coverage solutions that enable you to mitigate risks. In this way, your business is protected and strengthened. Speak with us now to learn more about our business insurance packages.