You may have heard about floods and landslides sweeping away entire business assets. You may have heard about fires and burglaries. You may have heard about rising vehicle accidents. You know machines can break down anytime. And you know businesses are vulnerable to all these risks and challenges.
In this fast-paced and unpredictable business environment, you must protect your business from potential risks and uncertainties. The most effective way to do this is to have broader insurance coverage.
Your business is protected from financial loss in the case of a crisis or other unanticipated circumstances through different business insurance schemes depending on the specific needs of your business, risk assessment, and company size.
With the insurance industry in Nepal expanding swiftly, it now offers a variety of coverage choices that are customized to meet the needs of your business.
Property insurance, vehicle insurance, plant and machinery insurance, and burglary insurance are some of the available insurance options for MSMEs.
However, for MSMEs, mainly micro and small businesses, standard insurance services are available, but insurers may see them as commercially uninsurable. Having said that, it is highly recommended — to ensure what is feasible and possible.
Why insurance for your business?
Running a business is not easy, especially in Nepal’s fluctuating and complex economic landscape, where challenges might appear from all sides. But with the right insurance coverage, you can sleep soundly knowing that your efforts and assets are protected against unforeseen circumstances and disasters.
Whether it’s a fire, a natural disaster, a theft, or those annoying legal claims, machine breakdown — insurance covers your back.
Your business can acquire financial resources to cover losses and carry on with operations by contractually shifting the risk to an insurance company. Insurance provides security, guaranteeing your business can withstand bad situations and rebound from adverse circumstances.
This blog highlights some important insurance policies that will protect your MSME in the long run.
Property Insurance
As a business — whether a hotel, restaurant, resort or any other form of business – you are most likely to build temporary or permanent structures that aid your business.
The Nepal Property Insurance Tariff 2076, Nepal, governs property insurance. A property insurance policy covers a wide range of assets against natural disasters like fire and lightning risks, storm risks, water-related risks, land-related risks, subsidence-related risks, explosion, riot, strike, and terrorism-related risks.
Property insurance pays for rebuilding, replacement, and repairs so you can quickly get back on your feet. Some property insurances also cover more than fixed assets like buildings. It also includes the items within, such as your expensive equipment, stationery, furniture, inventory, or even those valuable works of art.
Under the property section, three different types of policies can be issued:
- Reinstatement Value Policy that is only available for fixed assets
- Stock Declaration Policies are available for equities that fluctuate over time at a specific location
- Stock maintained in multiple locations is subject to the floating policy
Plant and Machinery Insurance
What if there is an unintentional malfunction or breakdown in your machinery? This is when machinery breakdown insurance comes to the rescue!
MSMEs can rely on this insurance to maintain their operations without worrying about unforeseen losses.
For contractors who use dumpers, excavators, rollers, drilling machines, and other equipment on building sites, there are contractor insurance schemes or engineering insurance schemes. The above-mentioned machinery represents a significant portion of a contractor’s investment, so the insurance plan shields the company from any potential damage to the plant and machinery that the contractors mobilize when carrying out a task.
There are also insurance schemes that cover your equipment. For instance, you manage a photographic studio, and someone unintentionally knocks over your pricey camera equipment. The insurance will cover the costs of replacing that priceless equipment.
Motor Insurance
Motor insurance is offered to cover damages for lost vehicles as a result of collisions and wrongful death claims. Three different insurance policies are offered under motor insurance: motorcycle, personal vehicle, and commercial vehicle.
Let’s say, you’re a small business owner in Nepal using automobiles, vans, or trucks, motor insurance is valuable for your business. Motor insurance pays for repairs, total losses, and even damages. Therefore, having motor insurance makes sure that you don’t lose sleep worrying about your wheels when you’re transporting items or traveling for work.
Agriculture and Livestock Insurance
Agriculture insurance provides coverage to protect the farmers’ investment and to prevent potential crop loss from natural causes including pests, diseases, hail, and hurricanes. Likewise, livestock insurance protects farmers’ investments and stops the death or potential loss of livestock due to various diseases or accidents for commercial or individual farms.
Agriculture insurance, also known as crop insurance, provides MSMEs in the agriculture industry with a safety net, enabling them to recover from unpredictable circumstances and maintain their financial stability.
Business Interruption Insurance
Even if you maintain precise financial records and follow industry best practices, some unavoidable situations could have a disastrous financial impact on your business.
In case, if you have to shut down your business due to unforeseen circumstances, business interruption insurance can help safeguard your company’s finances.
For instance, if an earthquake hits and damages your business workspace, forcing you to close until it is repaired. Business interruption insurance can help in that situation. This insurance covers interruptions to your activities and pays for income loss, ongoing costs, and even additional expenses.
Thus, with business interruption insurance, you can be back on your feet!
Professional Indemnity Insurance
Professional Indemnity Insurance is like a shield that protects you from the financial consequences of professional mistakes or negligence. The main purpose of this insurance is to protect service-based businesses.
Let’s say you work as a consultant and one of your clients claims you gave them bad advice that caused them to lose money. Without professional indemnity insurance, you would be responsible for paying court fees, settlements, and losses out of your pocket.
Further, it not only protects your business from losses but also protects your brand reputation too. A baseless claim or charge might damage your well-established professional reputation. With this insurance coverage in place, you can respond to claims with assurance as you have the resources to deal with the issue and protect your brand name.
Read here for Professional Indemnity Insurance.
Once you are aware of the various types of business insurance, you can seek assistance from an insurance agency that is suitable for your business. Don’t forget to understand what coverages a particular scheme provides and their premium rates.
So what are you waiting for? Dial an insurance agent immediately and get more information on ways to secure your business.
