6 mins read
Successful entrepreneurs and CEOs know that some risks are part of growing a business. In fact, no business has ever succeeded without taking a certain amount of risk.
However, while some risks can’t be eliminated, insurance can protect companies from unforeseen problems and threats like employee injuries or data security breaches.
Here are the six types of business insurance that every business owner should know, and how they can protect the company’s assets and continuity of operations.
Business insurance protects companies from potential financial losses by covering costs and damages caused by an unforeseen event. This helps companies deal with challenges without significant financial setbacks.
Different types of business insurance address different assets and risks. Property insurance safeguards physical assets, including buildings and equipment. Personnel-related insurance protects employees. Other policies mitigate the costs of legal issues or events that interrupt business operations, like data breaches or the death of a key executive.
Business insurance provides companies with a financial safety net so they can continue their operations even if something goes wrong. Benefits include:
Companies can combine different types of business insurance or add riders to their plan to form a comprehensive risk management strategy based on their needs.
This insurance policy covers any medical bills and compensation for any job-related injury. It ensures swift access to medical treatment and fair compensation. It also prevents financial strain for both the employee and employer.
Worker’s compensation insurance (and other types of business insurance for employees) doesn’t just provide financial protection. It shows you’re invested in your people. This builds your employees’ confidence in you as an employer and boosts their morale and loyalty.
Group Accident Insurance protects employees from financial losses caused by a workplace accident. This includes hospitalization, rehabilitation, and benefits for accidental death or dismemberment.
But unlike Workers’ Compensation Insurance, its business insurance coverage doesn’t include litigation fees and any legal liabilities or claims.
Group Life Insurance is provided by an employer or organization to its employees or members. Its premiums are much lower than individual insurance policies because the coverage is purchased on a “wholesale” basis.
While some companies automatically include it in employee benefits, others make it optional. They will subsidize part of the premium and deduct the rest from the salary.
However, the employer retains ownership of the policy, and the employee’s coverage ends when he or she leaves the company.
More companies worldwide are giving greater priority to employee healthcare benefits. According to McKinsey & Company's latest Employer Health Benefits Survey, 11% more employers now view health benefits as "very important" since the pandemic.
The survey participants included C-level executives, human resources leaders, and benefits managers. They revealed that they offer these benefits to enhance employee well-being, strengthen core benefit plans, and attract new talent.
Approximately 80% of companies either offer or express interest in specialized health programs. Many of them are also expanding their medical coverage. The survey found that in addition to medical benefits, the participants also believe that dental, vision, and short-term disability are a crucial part of a group insurance plan.
Notably, critical illness and disability have experienced the fastest growth in perceived importance.
This shows that more companies around the world see the importance of healthcare benefits in employee satisfaction, engagement, and productivity.
A “key man” is a person who is critical to a business. This could be the business owner, C-level executives or someone with very specialized skills or knowledge. They play such an important role that their sudden disability or death could affect the company’s operations and finances.
Unlike other types of business insurance such as group life or group accident insurance, the key beneficiary is the company. The plan proceeds cover the losses from finding and training a replacement or delaying a critical business project.
If the key man plays such an important role that the business must close because of their untimely disability or debt, the insurance proceeds can also be used for debts, employee severance pay and any contract penalties.
Insuring business property and assets is crucial for managing the financial burden of damages from fire, flood, typhoons, vandalism, or theft.
The policy can cover repair or replacement costs. This protects the company’s earnings in case it needs to close or scale down operations due to extensive property damage.
Most businesses handle sensitive information like intellectual property and employee and customer information. A cyber-attack or data security system breach may cause a myriad of business problems that could damage the company reputation and even result in messy lawsuits.
Data Breach Insurance or Cyber Liability Insurance protects the company from the overwhelming costs of a data security breach. The coverage can be used for identity protection solutions, public relations, legal fees, liability, and more.
This policy helps businesses prepare for digital threats and quickly respond to data security breaches. It also helps mitigate the increasingly complex and costly risks associated with today's interconnected and technology-dependent landscape.
You’ve worked hard to build your business from the ground up. It’s the product of your blood, sweat and tears. That’s why it’s important to protect your business and employees from unforeseen and unexpected crises with different types of business insurance. These policies provide a financial safety net, allowing you to focus on your goals and navigate any crisis.
Want to know more about business insurance in the Philippines? Talk to a Bancassurance Sales Executive of BPI AIA.
Get a clearer idea of your options, and customized solutions for your business needs and size. You can contact us through our website to set an appointment or visit any BPI branch.
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