No business runs without risk. If you’re a business owner, you already know how an insurance policy can help your business survive challenges – some predictable, but most unforeseen. It’s not an expense any business owner enjoys having to pay every month, so you’d want to be sure that you have enough insurance to cover your specific risks, without paying for any unnecessary extras. To do that, you need cover that suits your exact, unique business needs.

Identifying risks specific to your business

When considering different types of business insurance, keep in mind that you want to protect your business against events that it might not to be able to weather on its own.

For example, if your business is situated in the logistics sector, your most important asset is your fleet. If an unforeseen event grounds your entire fleet, it’s reasonable to assume that your business won’t be able to make a profit over the medium term. This is where your insurance policy should provide your business with financial relief, acting as a shield to help you get your operations back on track without causing sudden unplanned expenses.

Let’s go through the various types of business insurance available, so that you can choose an agile, fit-for-purpose insurance policy, knowing what will or won’t work for your needs. The 6 most common types of business insurance to consider are:

1. General liability insurance

This is an umbrella insurance for business-operations-related claims. If a person is injured on your business’s property or if you damage someone else’s property, this insurance will cover the cost of your defence and damages that are awarded. This type of insurance is best for any business that works directly with customers and the public. Most of these policies should also cover your business against libel and slander claims.

2. Commercial property insurance

This insurance covers your business assets against damage and theft. Ideally, policies of this kind should include cover for break-ins and disasters like fire or water damage. Any business with a physical building should consider this type of insurance seriously.

Insurance policies of this type cover your business for data breaches resulting from cyberattacks and other related events. If a breach of your digital systems results in customer or proprietary data being stolen, this insurance should cover the cost of legal fees and damages awarded. Some policies will also cover the cost of public relations to restore your business’s reputation.
 

4. Directors’ and officers’ insurance

This cover is applicable to large corporations. It protects directors and officers from claims that may arise from their decisions and actions taken within the scope of their official duties.

5. Commercial auto insurance

Any business that relies on a fleet of vehicles should have a commercial auto policy to cover all business vehicles, including company cars and freight. Apart from cover for physical vehicles, you can also get cover for the stock and tools required to keep your fleet maintained and on the road.

6. Professional liability insurance

This policy serves professionals in high-risk jobs like lawyers, accountants or consultants. It covers your business should a client decide to take legal action against your business. Notaries, real estate agents and insurance agents will also benefit from this type of cover.

How to choose the best insurance for your business

To find the policy that works best for your unique business needs, talk to different insurance advisers to help you find the right fit. Nedbank has several business insurance options, and our expert consultants can advise you on creating a policy to help your business thrive in a risk-filled world.