Doing business requires many entities, such as, manpower, buildings, machines, vehicles, infrastructure, and so on. Even slight damage to any of the above entities, will cost heavily for the business. Therefore, in order to bail out businesses from the losses, in the unexpected situations, insurance is mandatory.
There are different types of business insurance which are designed keeping in view various business departments and risks in mind. These business insurances provide insurance for all the business requirements. Business insurance are broadly classified as:
1. Property Insurance
Propriety insurance insures the business properties, buildings and business locations against earthquakes, floods, fire accidents and other major disasters. This insurance recovers the cost of damage for the business properties. In case, if a building is destroyed due to earthquake, then this insurance gives total cost to reconstruct the building. Due to the fire accident the internal furniture of a business is damaged, then the property insurance gives money to buy the furniture.
2. Causality Insurance
Causality insurance insures properties against losses. Property insurance and causality insurance differ slightly. The property insurance provides the benefits when the building is destroyed completely. But the causality insurance provides the benefits for all casual losses.
For example: your business is on the top floor of the building. Due to a small earthquake the first floor of the building gets damaged, due to which two walls of your building too get destroyed completely. Then your property insurance does not cover such losses, because it is not direct loss. In such cases the causality insurance recovers the cost of damage.
3. Bond Insurance
Bond is an instrument to rise the funds for the business operation. Bond insurance provides the security for the bonds which are issued by the business firm. It is a type of insurance policy that a bond issuer purchases it when issuing the bond. It guarantees the repayment of principal amount and it’s interest amounts to the bond holder in case the bond issuer defaults.
4. Directors and Officers Liability Insurance
This type of insurance covers directors and officers losses against lawsuit claims. This insurance covers the losses, when the directors and officer takes improper decisions.
5.Errors and Omissions Insurance
It is a type of business liability insurance for the professionals, who offer services, advices and financial assistance. This insurance provides the insurance for the losses due to errors and mistakes, while they are offering service to others. Not only the business has losses but the third party too has losses. To provide the insurance for these type of claims, a business should take this errors and omissions insurance.
6. Trade Credit Insurance
This insurance is offered for the business entities to protect their balance sheet assets, cash flows and profits. This insurance covers all possible losses, which arise due to default, insolvency and bankruptcy.
7. Commercial Auto Insurance
This insurance is offered to the business to protect their business vehicle. This insurance insures the business vehicles against accident losses. This insurance provides the benefits for the vehicle and for the injury person in case of accidents.
8. Workers Compensation Insurance
This insurance provides insurance for your workers against on the job injuries. This insurance provides wage replacement and medical benefits for the employees who got injured while doing the job.
A business should ensure itself with all the possible type of business insurances, to protect itself from the unexpected losses.