When running a business you must take out proper insurance to minimise your
risk. Which and how many insurances you need varies from one business to
Each type of insurance may have different names at different insurance companies. Insurance can be divided into three categories
Business insurance can be divided into three categories
- Insurance prescribed by national law
- Insurance for the owner
- Insurance which minimises the company┬┤s risk
Thus, you must investigate the coverage of each individual insurance. This is
often hard work.
1) Insurance prescribed by national law
Insurance prescribed by national law differs from country to country. But
usually it is compulsory to take out insurance for ones staff. The insurance
should cover injury at work, health problems, death and other personal problems
which affect the employee and his or her family.
2) Insurance for the owner
If you start a personally owned company you as a person are seldom covered by
the insurance for the company. You are the owner and not an employee. Therefore
you have an insurance which covers any injuries inflicted on you while working
in your own company.
3) Insurance which minimises the company┬┤s risk
The insurance companies can deliver whatever insurance you can think of. It is
just a matter of the price for the insurance policy. Therefore you have to
consider what kind of risk you can accept. This is called risk management.
The most normal insurances to take are:
- Professional indemnity insurance -
covers damages you may cause as an effect of your business
- Insurance against loss - by fire,
theft and water damage
- Consequential loss - insurance
covers the profit loss resulting from long term business interruption
- Project insurance - dedicated to one
individual large-scale construction project
- Transport insurance- companies with
large freight needs should take out proper insurance
You could contact insurance consultancies specialised in business consulting
that can help you find the best possible coverage at the lowest cost. Some
consultancies are definitely serious, but, like within other trades, here you
also risk running into some who are not.
Another solution is to ask your accountant. Only a few accountants are insurance
experts, however most are fairly experienced in the field.
- Go to next
business issue: Localization
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