Reasons to Buy Business Insurance for your Company

Protecting your assets is the most important investment that a business can do because accidents may occur at any point in time. When these happen and no business insurance was previously purchased to cover the damages, the business will have to cover out-of-pocket. 

Business insurance provides protection from potential legal liabilities and the potential losses that some unfortunate event might have on your company. Business insurance not only guarantees the safety of your business but also safeguards the interests of your employees and/or customers in case of accidental losses or unexpected occurrences.  
 
All businesses need insurance, but there isn’t one universal policy for all businesses. Different business types require different risks coverage and the coverages vary depending on many factors including the business type, sector, industry, and size. Corporate insurance companies in Singapore employ panels of experts from various industries to cater to all such businesses accounting for multitudes of factors and tailored requirements. 

It’s compulsory to have business insurance, even for small businesses 

It is mandatory for all businesses in Singapore to have corporate insurance, even if you are running a small business in Singapore. Work Injury Compensation Insurance (WICA) is one type of corporate insurance required by Singapore law.  

To make sure you’re fully compliant with the Work Injury Compensation Act, WICA insurance would be needed if you have employees who are: 
 

 Earning below $2,600/month 
 Performing manual labor, regardless of salary 
 Hired under the SG United training program 

You can be jailed for up to 12 months, and/or fined up to $10,000 when no Work injury compensation insurance is purchased for your employees if they fit in any of the categories above.

Employees protection is companies growth 

Increasingly, many job seekers are looking for positions with appealing employee benefits. While it is not mandatory, companies that offer employee benefits will attract and retain talents since their well-being is being taken care of by the company. 

Studies have shown that benefits are one of the most important aspects of a job. In fact, 92% of employees consider benefits important to their overall job satisfaction. Additionally, a third intend to leave their current organizations for a better benefits package, and almost a third stay because of its benefits.  
 
Corporate health insurance is usually one type of employee benefit that many job seekers will look out for in job opportunities. Having health insurance as a fringe benefit refrains employees from switching between jobs for employee benefits and encourages longevity with the company.  

Gives your company more credibility 

Companies with corporate insurance provide a sense of security for the clients since they are protected against unforeseen circumstances and insured companies are perceived to be more reputable and reliable. In other words, having corporate insurance enforces trust and helps the business to grow while keeping it protected against any possible mishaps. 

You’re More Exposed Than You Think 

In today’s society companies, including their officers, are exposed to a wide array of risks. These risks include litigations and lawsuits against a company or its officers. Such risks may arise due to unforeseen circumstances. Directors and officers of corporates are more exposed to risks since they are accountable for difficult decisions with a significant impact on the company. 

Liability insurances such as Directors and officers (D&O) insurance protect corporate directors and officers when the company or the individual is sued for decisions that may not play as expected in the future. The protection of D&O insurance covers actual or alleged breach of duty, failure in complying with the workplace laws, misrepresentation of company assets, or negligence. D&O insurance provides financial support for a conventional indemnification clause that protects them from losses incurred from lawsuits and other such scenarios.  
 
Additionally, having D&O Insurance creates awareness of the risks, thereby allowing them to be more conscious of the stakes for every decision. It also serves as an assurance for D&Os when making critical decisions.

Cyber threat is real 

While you are growing your company and adopting that latest new technology for your upcoming product, you are also exposing yourself to a slew of a relatively new risk – cyber risk. Although cyberattacks have been occurring for several decades, the number of cyberattacks has been on the rise since last year. Enormous data are collected and stored within the company when tracking potential clients’ purchasing behaviors and their financial details. Companies with data-rich vaults are more likely for hackers to attack. Garmin, a fitness brand, is an example of a corporation that has experienced cyberattacks where its products and services were taken offline, which caused them to pay millions of dollars in ransom.  

Despite the media’s focus on major cyber-attacks like Garmin and Netflix, as well as financial organizations like JP Morgan, the most common threats are for small and medium-sized firms. Small and medium enterprises have been popular targets because they lack the security infrastructure that larger companies have. According to industry analysts, 60% of small businesses would collapse within six months as a result of a cyber-attack, which can range from phishing schemes to malware attacks. There are also studies showing that 84% of cyber-attacks stem from human errors made by employees. 

Even if you are a small corporation, it is essential for small business insurance. You can never be too safe when guarding your corporation against cyber risks.

Future is unpredictable 

Running a business entail risks. Due to the many unanticipated circumstances that may happen, it can cause businesses to suffer from losses significantly and go bankrupt overnight. Having procedures and insurance in place to protect businesses might help to minimize losses in the event of a mishap. 

The resurgence of transmitted COVID-19 cases has caused unprecedented disruptions to businesses and many are forced to close till further notice. Traveling leisurely became impossible to prevent further transmission of the virus as the COVID-19 pandemic is around the world, thereby causing industries related to tourism to suffer significant losses. This has a huge impact on the operations of many businesses and can be taken as a teaching for our future. As insurance provides a safety net against multiple such unpredictable scenarios, it is an important aspect for all corporates to consider.

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