A few weeks ago we published an article detailing the most important insurances plans in Germany for individuals, so it was only logical for us to write a post for businesses.
With so many things to consider when starting or running your own business, corporate insurance and risk management can often be the last thing on your mind. However, having the right insurance plans in place can help your business avoid major financial loss resulting from lawsuits or unforeseeable circumstances. There are broad variances in insurance options for companies. Make sure to check with your insurance broker to find out what types of insurance are necessary for your business.
In the meantime, here are the five most important insurance plans for businesses overall:
Management Liability Insurance
Senior executives within your company make decisions and perform actions that may have a huge impact on your operations or your clients’ business every day. When managers make mistakes, they are often personally liable for the consequences. Management liability insurance, or directors and officers liability insurance, protects your managers against legal exposures. If financial losses incur due to a wrongful decision by your management, this type of insurance ensures your company and staff are protected from costs or damages lost as a result of a lawsuit.
Business & Professional Liability Insurance
As a business owner, you are exposed to a range of liabilities – any of which can subject your assets to substantial claims. Liability insurance covers pecuniary losses from third party claims and is compulsory for business owners. Depending on the nature of your business, there are two most common types of liability insurance: business liability insurance and professional liability insurance.
Business liability insurance takes hold in the event financial loss, property damage or personal injury occur in your office or on your service floors. If a customer slips on a wet floor and breaks his cellphone, for example, business liability insurance would cover both the cost of the customer’s physical and property damage. For business owners, business liability insurance can be a life saver when it comes to protecting your assets against claims and defending your company in legal procedures.
If your business is product-oriented, consider adding product liability insurance within your business liability insurance. A product liability insurance protects your business against any claims of property damage or personal injury caused by the products sold or supplied through your business.
If your business employs service-providing agents and licensed professionals, such as lawyers, accountants or insurance brokers – a professional liability insurance is necessary to protect your employees against errors or wrongful practice that cause damage to your clients or a third party’s data. For example, if a translator in your company translates a handbook for your product incorrectly, and in turn causes a customer to misuse the product and lose important data – professional liability insurance covers defence costs as well as liability costs.
Cyber Liability Insurance
Businesses are responsible for keeping all sensitive information about their employees and clients safe. If your company manages and stores personal data on your computers or servers, cyber liability insurance is a must. Data breach and cyber attacks occur on a daily basis, and cyber liability insurance protects your company against repercussions if such unfortunate circumstances do occur. It not only protects you against legal expenses and liability costs, but also covers against financial loss and the cost of repair in the case a hack destroys your entire system.
Commercial Property Insurance
We keep a lot of valuables in the office. Commercial property insurance ensures you are compensated for the loss of, or damage to your property and possessions. Machinery, electronic devices, furniture, and more are all covered from damages caused by fire, water, storm, glass breakage and theft. Depending on your needs, you can easily find a tailored property insurance plan suitable for your company. Your employee’s personal belongings can also be protected, as well as loss or damage of assets that occur outside of the office.
Legal Protection Insurance
Legal procedures are not only a source of headache, but can also be extremely expensive. While some of the aforementioned liability insurance options provide cover for legal fees, legal protection insurance covers all costs of litigation when your company is suing or being sued. Basic insurance coverage include breach of contract, tax claim issues, evasion of payment and copyright infringement. Depending on the nature of your business, there are also specific situations you can protect your company against and add onto the basic coverage. It may be helpful to note the CEO’s personal legal expenses can also be covered under legal protection insurance.