Which group insurance policies you should buy for your startup?

Being an entrepreneur may sound like an exciting thing to you. However, there are certain things that need to be taken care of in order to ensure the smooth functioning of your business. Moreover, when you have a start-up, protecting it from all risks becomes more important because funds are limited, but the risks are many. To combat your business against various risks and perils, it is important to buy group insurance policies which promise to cover you and your business against various risks.

Kinds of liability insurance:

1. Directors and Officers Liability (D&O) Insurance – Though having well-known individuals on your board will help to grow your company; it is also necessary to take immediate steps to protect them from legal liability that may arise due to decisions are taken by them during their managerial capacity.

The policy safeguards individuals and corporations from claims that may be brought against directors or officers’ due to actions or decision taken by them during their employment tenure. It may include breach of contract, wrongful interference with consumer, mismanagement, and breach of fiduciary duty, security fraud, consumer protection violation, failure to comply with the law, etc.

Read More: Types of group insurance schemes available for SMEs

While the coverage may vary from one insurer to another, the D&O insurance policy offers protection for board members, executive & officers, and their assets.The policy is required for attracting new managerial talent as well. You’re more likely to recruit good resources when he or she knows that he/she will be able to take important decisions without facing a lawsuit.

2. Commercial General Liability Insurance – The policy is useful as it takes care of the liability imposed upon you or your employees’ due to negligence. In addition to covering various types of losses or damages which may be caused to third-party, it also covers defence costs.

3. Product Liability Insurance – Though, you may never want it to happen intentionally, your products or services can harm the other person who uses it. If it happens, it may make you liable towards them. To combat any legal liability, go with a product liability insurance which you can customise as per your divergent needs.

4. Credit Insurance – Your start-up may also have to face with different losses that may not limit to only product and liability, but may arise if any debtor defaults to settle the dues. Here credit insurance plays an important role as it covers losses that may arise due to the situations like, non-payment or insolvency of debtors, etc.

In addition to the external parties, as the owner of a start-up, it is necessary for you to fulfill certain obligations and responsibilities towards employees also. The success of your start-up depends on your employees, who are working there to turn your dream into reality, which also makes you responsible towards their needs. In case they suffer any injury that may result in death or disability, you, as the owner, should provide them all benefits through worker’s compensation insurance.

Read More: Claim Documents Checklist for Group Insurance Policies

1. Workmen Compensation Insurance Policy – Well, many startups consider this insurance as an expense only and thus, look for ways to avoid it. However, they may have to pay hefty losses in case their worker gets injured at the workplace. The coverage you get through workmen compensation insurance policy not only safeguards your employees, but also gives you legal liability coverage and thus, protects you from the high amount of compensation that you otherwise would have to pay from your pocket.

For your start-up, you may either have a physical setup like office premises, warehouse, etc. Some startups also use their homes as their base. Events like a flood, burglary, earthquake, theft, etc.; can arise to disrupt the smooth functioning of your business. In order to get coverage against these perils, it is necessary for an entrepreneur to go with a comprehensive property insurance.

1. Office Insurance – Whether it is your property or you have rented it out, it is imperative to have the office insurance, which promises to cover your office and various equipments against both natural and man-made perils, like fire, air crash, riots, strikes, burglary, etc. Here you can also get a fire insurance policy which offers compensation in case of losses or damages due to fire accidents.
2. Motor Fleet Insurance – In case you have a wide array of vehicles for your business requirements, it is important to go with a motor fleet insurance to cover all the vehicles against various risks. It means instead of going with individual covers for each vehicle; it makes sense to go with a motor fleet insurance which covers all your vehicles under one policy. Remember, if you don’t buy any insurance policy, then you would have to pay for all the losses in case of an accident. If not a comprehensive insurance cover, at least you should go with a third-party insurance.

There are certain group insurance policies a startup owner may require as per business needs –

1. Group Travel Insurance – If you or your employee have to travel frequently due to business purpose, you should go with a travel insurance, which promises to cover the traveller against various perils like loss of passport/baggage, personal accident, flight cancellation, etc.
2. Group Health Insurance – It can offer coverage to the employee or their family members against rising medical costs. As the health care cost has reached a new height, this group insurance policy covers medical expenses.

Remember, a start-up doesn’t need only one kind of insurance, but a bouquet of different group insurance policies to get coverage against various risks and for the smooth functioning of the business. So, carefully analyse your business requirements and buy the policy accordingly.