The Top 7 Insurance Solutions for Your Business
Tags: Money, Insurance, Entrepreneurship, Small Business, Business

From the day an entrepreneur launches their business — even before they hire their first employee — they expose themselves to certain risks. An unforeseen disaster or single lawsuit could be catastrophic enough to cripple a business before it’s had a chance to get off the ground. That’s why it’s essential that business owners ensure they have the right insurance in place.

Covering everything from property damage to legal liability and employee-related risks, business insurance not only gives SME owners peace of mind, but it also offers financial security for their clients and can even help to attract investors.

Laurent Charlier, Managing Director of Cléma Risk Solutions in Hong Kong says, “One needs to consider business insurance as a necessary investment to grow your business rather than just an ancillary cost. Insurance acts as a windfall that allows smaller companies to compete against larger ones, helping secure clients by giving your organisation the financial strength it needs if something goes wrong.”

He adds, “Showing proof that your company has proper risk management in place is a viable way to attract potential investors. Founders that understand insurance show a certain level of wisdom and foresight — qualities needed to scale an organisation.”

Laurent recommends that successful businesses should have the following insurance types in place:

#1 — Public Liability Insurance

Considered the most common type of business insurance, public liability insurance covers legal costs and offers compensation if your organisation is being held responsible for a third party injury, death or property damage. The incident would need to have taken place because of your business activity, and would need to involve a client, contractor or another member of the public — employees are not considered a third party and are therefore excluded from public liability cover.

For example, public liability insurance would offer your business protection if a customer tries to sue you after slipping on a wet floor when visiting your offices where no warning sign was present.

What does it cover?

Public liability insurance typically covers:

Legal action for claims made against your business

Property damage

Bodily injuries

#2 — Business Owner’s Policy

Combining all basic insurance coverage into one package, Business Owner’s Policy (BOP cover) is an ideal solution for SMEs like restaurants, offices, retail and wholesale businesses that face low-to-standard risks. Helping to cover claims that could arise from business operations — such as theft, disasters, bodily injury or property damage — BOP cover could also include compensation related to personal and advertising injury.

What does it cover?

BOP cover usually includes:

Property all risks insurance

Business interruption

Public liability

Employer’s liability

Money insurance

Specific risks like product liability or professional indemnity are usually not included in BOP cover.

#3 — Professional Indemnity Insurance

If a client suffers a loss as a result of your company’s advice or professional services, they may have a right to sue your organisation for losses incurred due to their professional negligence. Professional indemnity insurance protects your business against these claims, covering any court costs, post bonds and lawyer fees. Not only does professional indemnity insurance take away any financial burden, but winning the lawsuit can help retain your company’s reputation.

What does it cover?

Legal costs and expenses incurred while defending against a negligence claim made by a client

Costs incurred as a result of claims made against an organisation due to inadequate advice, services or designs that caused a client to lose money

#4 — Product Liability Insurance

If your company sells and supplies products or repairs them, then product liability insurance is a must. Despite your business’ best efforts to ensure that all items are deemed safe, if they result in personal injury or property damage, you could easily see your business named in a lawsuit. From fires caused by defective batteries to salmonella found in food items and tainted baby formula — it’s essential to understand the risk that comes with selling items and the necessity to cover them.

What does it cover?

Legal fees and compensation that may be a result of damage caused by products sold, supplied or repaired by your organisation, with the incident having occurred outside of your premises.

A product recall from the market due to safety issues arising from a defect in one or more of the items can be added as an extension to product liability insurance.

#5 — Cyber Insurance

With fraud rates at record highs and posing real threats to businesses, protecting your organisation from cyberattacks, malware and data loss is critical. As fraudsters are coming up with more innovative ways to steal your company’s data and client’s details, there could be massive legal ramifications or significant financial loss if you’re not covered by cyber insurance and there is a privacy breach.

What does it cover?

First-party coverage against losses due to data destruction, extortion, theft or hacking

The policy indemnifies your company against lawsuits following a breach of private information or defamation

Expenses incurred to recover data, for a security audit, post-incident public relations, or for an investigation into the incident

A criminal funds reward, if one is requested

#6 — Employer’s Liability Insurance

Aimed to protect employers from financial losses due to work-related accidents that result in employee injury or death, employer’s liability insurance should be added to a business’ insurance policy as soon as its first staff member is hired. Even if employees perform seemingly low-risk work — such as desk-bound administrative staff as opposed to factory workers — slip-and-fall injuries or medical conditions like carpal tunnel syndrome could still result in a hefty claim.

What does it cover?

Compensation costs and legal fees that result from an employee or ex-employee suing an organisation for work-related illness or injury

The compensation figure usually includes medical care, death benefits and lost income up to the limit of the policy

Local regulations in some jurisdictions may make employer’s liability insurance mandatory. For example, it’s compulsory for all employees in Hong Kong and for certain types of employees in Singapore

#7 — Group Medical Insurance

While medical insurance is not mandatory in most Asian countries, it is beneficial for employees in jurisdictions like Hong Kong where medical costs can be extremely high. As a team is a major asset to any company, providing employees with some form of medical benefits can help business owners attract talent and retain loyalty.

What does it cover?

Inpatient or hospitalisation benefits, covering hospital stays for more than 24 hours

Outpatient benefits or ambulatory care, including diagnostics or treatments that do not require an overnight stay

Maternity, ophthalmology and dental benefits are not covered in the outpatient section but can be included as an additional option

Where To Get Business Insurance

Getting business insurance is simple and relatively straightforward as long as you opt for a credible insurance agent that can offer affordable policies based on your company’s specific needs. Cléma Risk Solutions offers your business insurance that matches your risk profile.

Founded in 2007 with offices in Shanghai, Singapore and Hong Kong, Cléma Risk Solutions is an online insurance intermediary focusing on small and medium-sized companies. Head here to get a quote today.