INSURANCE FOR START-UP II
There are key primary insurance you will need for for your start-up and below are some of such.
Many entrepreneur begin their small businesses in their own homes. Unfortunately, homeowner’s policies don’t cover home-based businesses in such a way commercial property insurance does. If you’re operating your business out of your home, contact OIAS Team who will be glad to help you arrange additional insurance to cover your equipment and inventory in the event of a problem.
Whether you own as a business or leased your space, property insurance is a must have. This insurance covers equipment, signage, inventory and furniture in the event of a fire, flood, theft and other related event. However, events like floods which are generally exclusion in standard property insurance policies can be negotiated and structured separately. Click to contact OIAS Team to help you.
If company vehicles will be used, those vehicles should be fully insured to protect businesses against liability if an accident should occur. At the very least, businesses should insure against third-party injury, but comprehensive insurance will cover that vehicle in an accident, as well. If employees are using their own cars for business, their own personal insurance will cover them in the event of an accident. One major exception to this is if they are delivering goods or services for a fee. This includes delivery personnel.
Business Interruption Insurance
Business interruption insurance compensates a business for its lost income resulting from damage caused by an event.
If a disaster or devastating event occurs e.g fire engulfing a business premises or equipment, a business’s operations will likely be interrupted. During this time, a business will suffer from lost income due to its teams’ inability to work in the office, manufacture products or make sales calls. This type of insurance is especially applicable to companies that require a physical location to do business, such as retail stores, farming, manufacturing etc
By having the right insurance in place, a business can avoid a major financial loss due to a lawsuit or devastating event. The OIAS Team is able to help you structure the most suitable form of insurance for your type of business. It is important that you put those plans in place as soon as possible.
Group Life Insurance
Once you have up to 3 hired staff or employees, the law mandates that you effect a Group Life Insurance.
Group life insurance covers the death of your employee while in active service. The benefit of this cover is paid to the beneficiary or dependents of the employee.
The employer pays for this coverage and the benefit goes to the beneficiary of the employee who dies in active service in your business. The benefit is typically, a payout equivalent to 3x (three) times of the annual emolument of the employee. This serves as a good incentive for your workforce. To arrange a plan, click here to contact OIAS Team
Employers’ Compensation Insurance
Employers’ Compensation Insurance provides income replacement and medical benefits to employees injured in the course of employment or active service. This helps you as a start-up business not to have to deal with lawsuit that an employee would have brought against you as a result of negligence. Once the first employee has been hired, workers’ compensation insurance should be added to your business’s insurance policy. This will cover medical treatment, disability benefits in the event any of your employees is injured or dies as a result of discharging his duty.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) or professional indemnity insurance covers your start-up business legal cost and expenses in defending claims made against you due to negligence, harm or loss etc caused by inadequate advice, mistake resulting from professional advice or service rendered by your business to your client.
If you provide advice, designs or service to your clients, this type of insurance must be top on your priority list. So if you are into Consultancy, recruitment services, designing, fitness business etc PL is a must have.
Product Liability Insurance
If your start-up manufactures products for sale on the general market, product liability insurance is an important cover you must have. A business that takes every measure possible to make sure its products are safe can find itself named in a lawsuit due to damages caused by one of its products.
Product liability insurance works to protect a business from lawsuit claims caused by use of a manufacturer’s product. OIAS is able to help start-ups tailor this coverage to specific type of products.
INSURANCE FOR START-UP I
It is important as a start-up business to take into consideration insurance and place it as a top priority in your business budgeting and planning.
To build a sustainable business, risk management must be at the heart of your planning and execution. This because something could go wrong while planning or when you commence business and so, you want to ensure that relevant insurance are in place to get your business going without interrupting your operations or impacting negatively on your projections.
As a start-up, getting the appropriate insurance to cover your business could be a demanding task but with help of an independent insurance agent as OIAS this task is simplified and every burden taken off you.
Most start-ups generally begin in a home office and with most family having no home insurance, even if they do, it is tempting to simply want to rely on your home insurance policy cover. However, if customers or suppliers visit your home, then this automatically changes your risk profile because of that element of commercial activity taking place on the premises. Talk to OIAS Team who is able to structure a good plan for you with underwriters including ensuring that your home based office equipment are adequately structured into your policy. Same apply also to more complex business and equipment.
No matter where you trade from, you should protect your business from losses that could shut your business down before or after you hit the ground running in your business.
From the day you commence business as an entrepreneur, you are exposed to certain risks right before the first employee is hired, and a business is at risk making it important to have the right insurance in place. One lawsuit or tragic event could wipe out a small business before it could get a chance to get off the ground.
Fortunately, businesses have access to a wide range of insurance types to protect them against these dangers. Here are some insurance types that as a start-up, budding or growing business you must have in place as soon as possible.
Learn more in part II of Insurance for Start-up article.
HERE IS WHY YOU NEED INSURANCE
Insurance is a way of managing risks. When you buy insurance, you transfer the cost of a potential loss to the insurance company in exchange for a fee, known as the premium. Insurance companies invest the funds securely, so it can grow, and pay out when there’s a claim.
Insurance helps you:
- Own a home, because mortgage lenders need to know your home is protected
- Drive vehicles, because few people could afford the repairs, health care costs and legal expenses associated with collisions and injuries without coverage
- Maintain your current standard of living if you become disabled or have a critical illness
- Cover health care costs like prescription drugs, dental care, vision care and other health-related items
- Provide for your family in the event of a death
- Run a small business or family farm by managing the risks of ownership
- Take vacations without worrying about flight cancellations or other potential issues
We’d take the time to review your policies when you contact our helpful Advisors to answer your questions or get advice. A little knowledge can make a big difference when it comes to buying the right insurance protection for you and your family.
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