First time starting a business?
Starting your first business is exciting but stressful. Money is tight, day-to-day problems are filling up your mind, and it feels like there is no space at all to think about future issues.
That doesn't mean you can put the planning aside for later. Insurance ensures that your business is financially secure and can safely face any problem that pops up. In fact, some insurances are even compulsory in Singapore. Otherwise, you may have to pay out of your own pocket for any costly damages and legal claims against your business, and no one would like that!
You may be confused by the huge variety of protection that different insurances offer. Variety is always good - it assures a comprehensive protection. But right now, you just need the bare bones to pull your business together, and we've put it together for you.
There are generally three big groups in business insurance - Employees, Property, and Legal Liabilities. From these, here are the 4 (+1) of the most vital insurances you will need for your brand new business.
1 - Work Injury Compensation Act (WICA), also known as Workmen's Compensation
This insurance covers your liability as an employer to pay compensation to your employees when they suffer work-related injuries. It's compulsory for all employees who do manual work, as well as employees who earn $2,600 or less a month.
Through WICA, you can claim medical expenses, lump sum compensations, and medical leave wages. Accidents, injuries, and illnesses happen, and this insurance makes sure your company and its employees are well-protected.
2 - General/Public Liability
Just like its name, it covers you from 'general' claims involving bodily injuries and property damage resulting from your products, services, or operations. It helps you cover medical fees and any legal defense costs incurred as a result, for which your company may be legally responsible.
These 'general' claims can come from your customers (who are partaking in your business) or even from your office's landlord (from whom you are renting your business's office space).
3 - Professional Indemnity Insurance
People make mistakes. Sometimes they're tiny ones that pass by without notice, other times... Well, not so much.
A professional indemnity insurance safeguards your business against legal liabilities that arise from wrongful acts committed during the performance of professional services. They range from negligent acts and errors to breaches of professional duty.
For instance, an error in a report sent to your client resulted in them losing money? That's cause for a lawsuit from your client!
4 - Business Interruption Coverage
Life is unpredictable, and so are businesses. The Covid-19 pandemic should be a clear enough real-life example. Suddenly, businesses everywhere are forced to close down with barely a notice.
A business can't work if it's not open for business.
Fortunately, a business interruption coverage will help cover the loss of income that your business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster.
This will definitely take away the stress from you worrying about the what ifs that could happen to your business.
And now, a bonus +1 point:
5 - Commercial Motor Insurance
Does your business use vehicles for transporting heavy loads? Or maybe you offer vehicles for private hire use. As long as vehicles are a vital part of your business, you should make sure to have it insured and safeguarded.
Commerical motor insurances covers loss or damage to your vehicle as well as any legal liabilities arising from a third party's injuries or property damages.
Having read through the key coverages you need to kick-off your new business, you probably have a clearer mind on the kind of issues you need to look out for. Reach out to us if you need any advice - we can provide you with in depth comparisons between different insurance plans and figure out which one best suits your specific needs!
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