Business Insurance You Must Have

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Going into business is a risky game. You never know what disaster might befall you and your firm. 

Business insurance is a way of covering your back and ensuring that all your hard work doesn’t vanish in a puff of smoke. 

The commercial insurance market, however, is complicated - there are a variety of different insurance products you may need. Here are five types of insurance that you can’t do without. 

Key Man Insurance 

Key man insurance, also sometimes called “key person insurance,” is useful for companies that depend on the knowledge, leadership, insight or expertise of a single person, and whose operations could not recover if that person fell sick or died. 

The way key man insurance works is simple: you pay a fixed premium to an insurer who then promises to pay a negotiated monthly payout if the “key man” cannot work. If the key man dies, then the insurer will sometimes pay out a lump sum. 

Relevant Life Insurance 

The purpose of relevant life insurance is to allow employers to offer death-in-service benefits to employees. In the UK, policyholders do not have to pay tax on payouts. The proceeds usually go to the employee on a diagnosis of a terminal illness, or their family if they die. 

Companies take out relevant life insurance for several reasons. First, it’s a tax-deductible business expense and frequently more affordable than some group policies. Second, you pay premiums monthly, helping to keep costs predictable. Finally, it’s popular among employees because it’s free from inheritance tax. 

Shareholder Protection Insurance 

Shareholder protection insurance pays out a lump sum equivalent to the value of the equity that a shareholder has in your firm if they die. The purpose of the insurance is to allow the remaining shareholders to buy out their stake from their next-of-kin. Shareholder protection insurance helps to guarantee the continuity of the business and prevent the stake from falling into the wrong hands. 

Product Liability Insurance 

If you sell a physical product on the marketplace, then it’s vital that you have product liability insurance. Product liability insurance protects you against lawsuits claiming damages for injuries caused by the things you sell. 

The product liability of each business varies from company to company. Insurers consider some types of business low-risk. Companies that sell things that do not interact with the human body and are not a choking hazard often don’t have to pay as much for coverage. By contrast, companies that make toys and dangerous products, like knives, often have to pay more. 

Business Property Insurance 

Business property insurance is analogous to home insurance. You pay a premium, and in return, your insurer promises to pay out if you suffer damage to your property. 

Business property insurance covers things like buildings insurance, such as a shop or office, fixtures and fitting insurance, contents insurance, such as tables and chairs, and tools insurance. You can also buy specific types of business property insurance that cover things like theft of stock, building materials, and so on.

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