Critical Covers Required by Small and Mid-Sized Businesses


Do you own a small business or a mid-sized one? You should consider how much capital and other expenses you spend to build your business. Many small and medium-sized businesses don’t have enough financial support. They invest what little they have in working capital and purchasing raw materials. They must protect their investments. Insurance is required for each type of business and any potential risks.

Covers critical are required
A comprehensive policy should be available to cover all risks for small and medium-sized businesses. For most risks, the policy should cover property and liability insurance. Let’s talk about them in more detail.

Property insurance
Property insurance protects your business and all its assets. These include inventory, machinery, buildings and other assets that are related to the business. It is vital to protect all of your physical assets, which could be lost or damaged.

These include the building where the business is situated, regardless of who owns it (own or leased), equipment and furniture, machinery, data processing unit such as computers and their accessories, furnaces, important papers, books; as well as other non-physical assets like intellectual property rights, reputation.

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• Property insurance, in general, covers the risk of fire, disasters such as lightning, damage to property because of displacement to different location, the risk of damage to property by storms, mob violence, damage caused by vehicle and aircraft.

• A special form of property insurance covers the risks that are not mentioned in property insurance papers.

Liability insurance
Liability insurance covers the possibility of a claim due to
• Damage to others’ property
• Bodily injury caused to anyone (other than employees) because of business operation
• Personal injury including libel and slander
• Advertisement that misleads audience and is false

Things to remember when buying property and liability insurance
• Properly assesses risks: While considering the amount of insurance cover you are going to purchase, make a realistic estimate of the risks, your business is likely to face and see to it that all the risks are covered under your property and general liability insurance. This means that your insurance coverage should cover all risks to your business.

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• Expose security measures to get discounts: While purchasing property and liability insurance let the insurer know the security measures you have taken in your business such as security cameras, fire and gas alarms and the like. To get discounts, provide details about building renovations, such as plumbing and major repairs, particularly in the ceiling cooling or heating systems.

• Purchase required coverage only: Every business faces risks of one sort or the other. Calculate the risk that your business is taking. You should not purchase more insurance than you actually need. If you do not need it, you’ll have to pay more for no gain. Also, make sure that you do not purchase too little insurance. Your insurance won’t be enough to protect you in such cases. Therefore, you should ensure that your insurance covers all risks that your business may face.

• Deductibles: A deductible is an amount paid by the policy holder to the insurer. Your insurance premium will be less if you can afford the deductible. Therefore, deductibles are part of your premium. Thus, deductibles help you pay lower premium.

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• Approach a reliable brokerage firm: Once decided to purchase property and liability insurance, approach reliable brokerage firm that you can rely on. They will help you assess the risks of your business, find the best policy for you and offer discounts.

Your small- or medium-sized business needs to have property and liability coverage. This is because there are always risks. These risks can be mitigated by purchasing insurance.