Business insurance is a policy that protects companies or businesses against possible risks that may materialize and cause damage to the firm. In this article we will describe the definition of business insurance along with its types.
In other words, business insurance is one that a company hires to cover itself against events that can cause losses.
There are different types of business insurance (which we will detail later) and the cost of which depends on the characteristics of each company and the risks that are being covered.
When firms contract insurance of this type, they are preventing certain risks, which would be more expensive to cover compared to contracting the policy.
Likewise, there are some cases in which the hiring of insurance is mandatory. Like those policies that protect workers against high-risk activities. These are required in items or sectors such as mining or construction, for example.
Another point to keep in mind is that the cost of insurance will be lower if the company has implemented risk prevention systems. In this sense, a good example could be the installation of fire alarms, which allow reducing possible damage or loss in the event of an accident.
7 types of business insurance
At above you got the definition of business insurance now we are elaborating its types.
Protecting the company against accidents and unforeseen events is essential for its survival, especially in times of high competition. Therefore, managers and entrepreneurs must keep themselves informed about the types of insurance for companies available in the market.
Business activity involves several risks and it is necessary to be prepared not to suffer financial losses with the loss of equipment, structure, data, and even employees.
So, so that your business can maintain a good level of productivity and be protected from accidents that may occur, follow 7 types of business insurance that can help you in difficult times!
1. Asset Protection Insurance
The first type of insurance presented is also one of the most relevant in the current context. Protecting assets is a real need for contemporary businesses, regardless of size and business segment.
In addition, in our country, some insurances of this category are mandatory and constitute requirements for the company to operate regularly, such as:
- fire insurance ;
- insurance against accidents at work.
Others, although optional, are extremely important for business security, enabling the enterprise to be able to quickly and efficiently face the impacts of an accident, avoiding even more significant losses.
This is the case, for example, with insurance against theft and insurance for reimbursement of emergency expenses.
2. Insurance for Civil Liability Companies
Business activity, especially that which involves the direct provision of services to the consumer, is always permeated by the risk of causing damage to third parties , whether due to failure to provide or error in the execution of the work.
In this case, it is prudent to have insurance for civil liability , which will allow that the indemnities and reimbursements due do not affect the functioning of the company. Remember that, in addition to bringing security to the organization, it also protects your customers and third parties that may be affected.
Among the professionals and types of companies that are most subject to this type of risk and for which, therefore, it is most recommended to take out civil liability insurance are:
- engineers and architects;
- doctors and dentists;
- Truism agencies;
- advertising and marketing agencies;
- Beauty salons;
- educational institutions;
- event producers.
It is worth noting that the coverage can be customized according to the particularities of each activity.
3. Insurance for interns
Companies that hire interns need to provide insurance for these students.
In practice, it works as personal accident insurance and has been mandatory since 2008, when Law No. 11,788/08 came into force , known as the Internship Law. It should be noted that the Law provides that it is mandatory for the company to carry this insurance.
Since interns don’t have the same rights and protections as an ordinary employee, it’s only natural that the law tries to give them as much peace of mind as possible.
4. Business health insurance
Protecting and caring for employees is a smart move on the part of HR managers and entrepreneurs. After all, human capital is the great differential of a company.
Therefore, taking out health protection insurance can be compared to instituting a health plan for your employees. The policy may include dental and health coverage . With this, you will have healthy, happy and motivated employees to perform their duties.
5. Business life insurance
The first objective of a business life insurance is to protect the human capital of the company. In addition, the employee being sure that his family will not experience financial difficulties if something happens to him gives much more peace of mind in his professional day-to-day.
Thus, business life insurance is an excellent mechanism for your company to be able to attract and retain talent.
Basic coverage is for natural or accidental death. In the event of an accident, there is a guarantee of payment of the capital contracted in the policy.
It is also possible to customize coverage according to your needs. Among the possible additional coverages are:
- permanent total or partial disability due to accident;
- per diem for temporary incapacity;
- reimbursement of medical, hospital and dental expenses;
- funeral assistance.
The cost of this insurance is calculated based on the age of all company employees. Thus, the greater the number of employees and the younger they are, the lower the cost per employee.
6. Fleet Insurance
Public security in Brazil is a concern and, in this context, cargo theft is one of the fastest growing crimes in recent years. In the state of São Paulo alone, 8,738 cases of cargo theft were recorded in 2018, or 24 occurrences per day, according to data from the Secretariat of Public Security . These are alarming numbers that are repeated in other units of the federation.
In addition to the financial loss for the company, this type of event puts the safety of executives and employees at risk. That’s why fleet insurance is more necessary than ever to protect company vehicles .
It ensures not only the protection of property , but also the safety of employees who use company vehicles to work. Among the coverages offered are: collision, fire, robbery and theft, optional civil liability of vehicles (material and bodily damage) and personal accidents per occupant.
Thus, with a single policy, your entire fleet is safe, simply and economically.
7. D&O Insurance
D& O insurance is aimed especially at top executives of companies and aims to provide coverage for various situations for which their management may be held responsible.
Statutory and non-statutory directors , members of the board of directors, members of the supervisory board, attorneys with management powers, lawyers who are employees of the company and risk managers are protected .
As you have noticed, there are several types of insurance for companies and they are very important for the protection of the company and its employees.
When you can hire an insurance company and count on this type of protection, employees, managers and executives are able to dedicate themselves to their duties with more commitment, as they know that the business and they themselves will not be helpless in the event of a harmful event in the company.
we hope that after reading this post you are able to understand not only the definition of business insurance but also its types as well.