Setting up a business? 10 Insurance policies you might require
Starting a business is an exciting and challenging endeavor that requires careful planning and preparation. One important aspect of setting up a business is making sure that you have the right insurance coverage in place to protect your assets and operations. In this blog post, we will look at 10 insurance policies that you might need to consider as you set up your business. From property insurance to Medical Insurance, these policies can help you mitigate risks and safeguard your business against unexpected losses. Whether you’re a startup founder, small business owner, or entrepreneur, this guide will give you a comprehensive overview of the insurance policies you should consider as you establish your business.
From property insurance to workmen’s compensation insurance, here is a list of insurance types to consider whilst setting up your business in the UAE. According to Arabian Business, insurance types “vary according to the business, type, nature, complexity, and location where the business is operating”.
Some of the more common and important insurance that one should consider are given below:
- Property Insurance
Personal property insurance is usually covered by a homeowner’s or renters’ policy. The exception is personal property is very high in value and expensive. Property insurance often covers damage caused by fire, natural disasters, or theft. If there’s a claim, the property insurance policy will either reimburse the policyholder for the actual value of the damage or the replacement cost to fix the problem.
- Business Interruption Insurance
Business Interruption Insurance is a type of insurance covering the loss of profit following a loss or damage to the property causing interruption. It replaces the business’s income lost due to disasters such as fire or natural causes. Business interruption insurance is not sold separately but is added to a property or casualty insurance policy.
- Commercial General Liability Insurance
This type of insurance “is more a third-party liability, intended to cover the liability claims arising out of negligence resulting in third party bodily injury or property damage. Commercial General Liability Insurance comes in two policies — a claims-made policy and an occurrence policy. The former covers claim regardless of the details of the event whereas the latter covers claims in which an event must take place during a particular period. This type of insurance covers liability claims arising out of negligence resulting in third-party bodily injury or property damage.
- Vehicle Insurance
Auto Insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. The Vehicle or Auto Insurance “covers motor vehicles of the business against own damage or third-party liability” In exchange for your paying a premium, the insurer agrees to pay your losses as outlined in your policy.
- Money Insurance
The Money Insurance “covers money in transit, safe or in premises” and covers business premises. Money includes cash, bank drafts, cheques, postal orders, currency notes, treasury notes and postage stamps. In Money Insurance, the company is protected in case it encounters theft or robbery of money carried by the individual or authorized persons.
- Fidelity Guarantee Insurance
Insurance company Fidelity Guarantee Insurance covers “dishonesty risks of employees”. This type of insurance covers direct financial losses due to dishonesty by a company’s employees. Theft or fraud can also be in the form of cyber-attacks, credit card forgery, and through destruction of property.
- Workmen’s Compensation Insurance
The Workmen’s Compensation Insurance “covers employees against work-related accidents or occupational sickness as per the law of the country.
The insurance covers medical expenses and loss of wages from any kind of sickness or accident that could occur during employment.
According to the UAE Federal Law No.8 of 1980, it is mandatory for employers to pay compensation to the employee(s) in case of an accident arising out of and in the course of their employment.
- Medical Insurance
Insurance UAE: Medical or Health Insurance is for employees and their dependent members. It is the most common insurance policy opted by businesses in the UAE. However, the insurance is extended to direct family members such as the individual’s spouse and children. The insurer will be required to pay for specific expenses related to illness, injury, pregnancy, or preventative care.
- Cyber Protection covers
Companies must be protected against cyber-attacks “as the risk of cyber loss is increasing. Recently, Spinneys fell victim to a ransomware attack, causing many companies around the UAE to double down on their cyber insurance policies. Cyber Protection covers offer companies access to highly experienced experts to nullify the threat as quickly as possible and help mitigate disastrous consequences, without incurring a drastic loss. Additionally, this type of insurance also covers the costs of reinstalling hardware and software.
- Directors and Officers Insurance
The insurance covers directors and officers or their company, if sued. However, these insurance claims are paid to cover losses incurred from the lawsuit including legal defense fees.
Side A coverage covers directors and officers for claims where the company refuses to or is financially unable to pay for indemnification.
Side B coverage covers the losses of directors and officers when the company does grant indemnification.
Side C coverage, also called ‘entity coverage’, extends coverage for the corporate entity itself.”
These insurance policies can vary depending on company needs and exposures. setting up a business requires careful consideration of many different factors, including insurance coverage. From Workmen’s Compensation Insurance to Cyber Protection covers, there are a variety of policies that can help protect your business and its assets. It’s important to work with a professional like Consultycs to determine which policies are right for your business and industry, and to make sure that your coverage is adequate and up to date.
