Small company insurance can save your company from going bankrupt, so it’s important to get it even if it’s not required by law to have certain types of coverage. There are many different kinds of commercial insurance, and some of them may be mandated by law if certain conditions are met.
Insurance for your company might be an expensive undertaking, but it might end up saving you thousands of rands in the event of a catastrophe. It is in your best interest to carefully read over the nuances of your insurance policy before agreeing to sign any contracts for coverage. This article is for owners of small businesses who are interested in learning about the various types of insurance insurance policies that are available to them.
Startup companies and small businesses typically operate with a limited spending budget. As a direct consequence of this, it may be tempting to forego getting certain kinds of insurance that aren’t mandated by the government. According to the results of a poll of 30,000 company owners that was carried out by Next Insurance, 44% of the businesses that responded have never had any kind of insurance at all.
Sadly, such a hazard could result in your company a lot more money than the insurance payments would have cost if it had been covered. According to Jamie Dokovna, an employment lawyer with Becker & Poliakoff, skipping out on purchasing insurance solely due to the fact that it is not mandated by law is not the best course of action. Based on the insurance company Insureon, the average cost to solve a resulting lawsuit is up to R40,000; for example, if a consumer slips and stumbles on your property and injures themselves as a result.
Dokovna stated that there are many instances in which people make decisions that are “penny wise but pound foolish.” “When it comes to the cost of insurance, some proprietors of smaller companies take a look at it and conclude, ‘Well, it’s a little costly, so I’m willing to take the chance.’ But it is not less expensive in the long run to go without insurance and then wish you had it when you need it. According to Dokovna, the best course of action is to make informed choices regarding the types of insurance policies your company needs and does not need. In order to make this call, you must have a solid understanding of your industry.
Different Categories of Insurance Protection
Once your company reaches a certain size, you are legally required to obtain certain types of insurance coverage. For instance, the Affordable Care Act made it mandatory for businesses with at least 50 employees to provide their workers with health insurance that was sponsored by the employer.
When small businesses fail to maintain certain types of insurance, they leave themselves vulnerable not only to the dangers that those policies are designed to protect them from, but also to legal action brought on by the government for breaking the law. There are certain kinds of insurance that aren’t mandated by the government but could prove to be beneficial to your company regardless of the line of work you’re in.
Insurance for Legal Responsibility
Your company can be safeguarded by having general liability insurance in the event that a third party alleges that your company was responsible for their physical injury, damage to property, or acts of libel or slander. In the scenario involving a slip and fall that was presented earlier, general liability insurance might have paid for the costs of attorneys and settlements.
In spite of this, some companies may decide that the possibility of a customer getting hurt on their premises is so remote that they choose not to purchase liability insurance in the event that a customer does visit their location. When compared to, for example, a retail store that interacts with customers on a daily basis but chooses to take the risk anyway, this is a calculated decision and most likely an acceptable risk.
Compensation for Injured Workers
Workers’ compensation is insurance that covers medical expenses and lost wages for workers who are hurt in the workplace or become ill as a result of their employment. With the assistance of these benefits, employees are able to pay their hospital expenses, have their wages replaced, or pay for continuing treatment such as physiotherapy. Workers’ remuneration protection and policies are required to be maintained by most states for businesses that employ more than a certain number of people (the exact number varies from province to province).
Insurance for Professionals Against Legal Responsibility
Professional liability insurance, which may also be referred to as mistakes and omissions insurance, is designed to assist in covering the costs of legal defense should a third party assert that your company committed errors. If you offer a service to customers, purchasing this insurance is particularly important, as complaints about lateness, incompleteness, or inadequacy of work can result in expensive legal action.
Insurance Coverage for Commercial Properties
Brick-and-mortar businesses are the ones who need this type of insurance because it helps cover costs that are incurred as a result of fire damage, theft, and natural disasters. On the other hand, this insurance does not cover damage caused by earthquakes or flooding; for that, you will need to purchase a separate policy.
Insurance for a Company’s Earnings
In the event of property damage, a company’s lost income can be partially compensated for by purchasing business income insurance. It may be applied to the payment of rent, utilities, or wages.
Responsibility for Employment Practices
Insurance that covers employment practices provides protection against any legal action or grievance an employee might bring against their employer, including the following examples:
- Sexual assault lawsuits
- The unjustified ending of employment
- Timecard disparities
- Violation of the terms of the employment contract
- Lack of employment or promotion opportunities
- Unlawful discipline
- Institutional racism claims