The value of a particular insurance cover cannot be assessed by its legal necessity. Many optional insurance covers, are in fact, vital for the successful running of a tradesman’s business, regardless of whether you are a one-man show or a contractor.
Here is a breakdown of
six vital insurance covers that you must include in your umbrella insurance
policy for securing your business against sudden financial upheaval from
injuries to clients, employees, third parties, legal wrangles with suppliers
and distributors, loss of tools and equipment, client data getting compromised,
etc.
In the insurance
sector, if only a few covers are mandatory, SMEs and VSEs often have an
interest in taking out Getty Images
The work done by
builders, plumbers, carpenters, electricians, and other tradesmen influences
the lives of others. Poor workmanship can lead to loss of life and livelihood
for clients.
1. Property insurance
– Your business needs cover to ensure that your owned or rented business premise is protected from risks that include fire, flood, and theft. Warehouses, factories, and offices are vulnerable to these risks and damage can set back a business in a big way. You may be asked to submit invoices for the repair and replenishment work done, before the insurance company reimburses you according to the terms of the policy. Find out about the damages automatically included in the policy, and those that are an add-on and must be purchased separately.2. Insurance against operating losses
– It’s an insurance to cover the fixed costs of operation while you work to get your company back on feet after a disaster. With this cover, you do not have to worry about salaries and loan interest repayments. It is a worthwhile insurance for many SMBs because when you’re busy trying to pay for office space after a disaster at the old one, and taking stock of losses, your business will suffer if employees are not paid. Find out the duration for which the insurance company extend help in the event of such calamities. Does the company offer cover to offset any losses caused by business disruption arising because of suppliers and subcontractors?
3. Vehicle insurance
– Cover against damage caused to others by your vehicle gives you peace of mind. There is always a risk that a third party gets injured or property damage occurs when you’re using the vehicle in the course of work. The premium paid depends on the number of vehicles to be covered, make and model of vehicles, routes on which the vehicle will operate, etc. The other aspect of vehicle insurance relates to cover for damage to the vehicle in an accident.
4. IT risk insurance-
Computers are ubiquitous. Insurance against risks to computers and IT infrastructure will give you peace of mind. Regardless of trade, your business uses computers to store invoices, receipts, sundry transaction details, maps, plans, and customer details. Loss of data through damage or theft can be a huge setback, and replacement of hardware or software is a cost. Lack of connectivity can hamper work, set you back financially because of penalties, and hurt reputation. IT risk insurance is necessary for tradesmen.
5. Environmental risk insurance
– If your work poses a hazard to the environment through air pollution, water pollution, soil pollution, groundwater pollution, etc then you must have this cover to protect you from unforeseen penalties. Penalty costs cover expenses to remove pollutants from the immediate environment, damage assessment costs, and administrative costs for the entire process. Check if the work you do is subject to specific norms and requires separate cover.
6. Professional liability
– Though optional legally, this insurance is vitally important for most businesses that offer consultation. It covers you in case of defending against claims arising from losses incurred because of the advice you gave, suppression of facts on your part, negligence, and misrepresentation. Liabilities not covered by other common insurance types are covered by professional liability insurance.
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