Introduction 

Commercial insurance refers to the insurance that protects from any unforeseen circumstances that could affect your business. This kind of insurance is offered to commercial entities such as businessmen, industries etc. and provides cover for various business and related needs. Commercial insurance is a type of business insurance that offers solutions for industrial sectors including but not limited to construction, manufacturing, telecom, textiles, logistics etc. These solutions aim to offer a safety net for business operations and assets when the need arises.

There are usually three main types of commercial insurance – property insurance for your equipment and office premises, workers’ compensation to cover your employees’ medical costs if they get hurt while at work, and commercial general liability insurance for damage to a third party.

Types of Commercial Insurance

Commercial insurance categories include property, workers’ and liability compensation. The types of plans depend on the business and most insurers will have special or custom packages for businesses that fall under their solutions purview. Here are some of the common types of commercial insurance available in the market.

  1. Shopkeeper’s Insurance – This insurance plan covers damage to shop buildings and contents, housebreaking, burglary, cash insurance, bicycles, signboards, baggage, personal accident, liability etc. as per policy wordings.

  2. Property Insurance – Considered to be one of the most common types of commercial insurance, this policy covers damages to your commercial properties. For example, a fire damaging your office space will be covered under such policies.

  3. Liability Insurance – The main focus of this kind of plan is to cover large multinationals looking to offset business liability risks in diverse locations around the world. It generally covers bodily or personal injury and infrastructure damage, product liability, clinical trials, product recall, workers’ compensation etc.

  4. Marine Insurance – Marine insurance plans provider cover for marine cargo risks for industries such as oil and gas, power generation, wind power, paper and pulp, steel mills, infrastructure, machinery upgrades and so on.

  5. Engineering Insurance - Engineering insurance plans cover defined engineering risk classes including oil and gas, power, heavy industries, constructions, transportation systems etc.

  6. Energy Insurance - These policies offer flexible covers for challenging onshore and offshore industries and provides comprehensive cover including downstream, midstream and upstream assets and operations.

  7. Employee Benefits Insurance – Such plans offer health insurance coverage to employees of organizations such as group mediclaim or group personal accident plans.

  8. Aviation Insurance – Aviation insurance provides cover for all types of aircraft such as small aircraft or private jets against disappearance, total loss etc. It also offers cover for damages to equipment, tools or supplies of the company, apart from dangers arising out of war and other acts of aggression. Crew members are also covered under such policies.

  9. Automobile Insurance – This plan covers damages to or loss of commercial cars, trucks, vans or other vehicles as well as injuries to property or persons.

  10. Bankers Indemnity Insurance - Aimed to cover banks and all branches of a particular bank in the country, this policy offers cover against cash or securities lost on-premises, in transit, forgery, dishonesty, hypothecated goods, registered postal losses and appraisers, among others.

Additioanl Reading: What is Group Insurance Policy?

How to Choose a Commercial Insurance Policy

Every business is unique and therefore, the best commercial insurance for small business isn’t the same for all. Here are some things to keep in mind to make sure that you buy commercial insurance coverage that is best for your business:

  • Know what you need. You might need extra workman’s compensation as part of your policy if you are a general contractor, or want to add commercial equipment insurance if you’re a photographer.

  • Know what your policy covers. It’s not always obvious what is included in a commercial liability policy, so it’s important to read the policy carefully and ask questions if anything isn’t clear.

  • Compare policies. It’s best to get around three commercial insurance quotes so that you can compare the monthly premiums and what is and is not included.

  • Think about whether you prefer to have a bigger deductible so that you can pay a smaller premium or the other way around.

  • Whatever policy you choose, review your insurance each year to check whether it still fits your needs. You might need to increase your level of coverage or add another area of coverage.

What to Expect from a Commercial Business Insurance Provider?

When you want to buy an insurance policy, it’s best to opt for an insurance provider who has a good amount of experience in dealing with entrepreneurs and business owners. It is preferable to choose one who specializes in working with small businesses. It’s even better if they are already used to providing policies for your type of business so that they know what you’re likely to need and can make suggestions if there’s anything you’ve missed.

Be careful not to pay more for insurance than necessary. That means looking for a provider who doesn’t charge hidden fees and is transparent about what is included in your policy.

If your business is just starting and cash flow is still tight, it’s a lot easier to use an insurance company that lets you pay monthly instead of annually without charging you extra.

It’s also important to have your certificate of insurance which proves that you are covered. An insurance provider that makes it simple to deal with your insurance needs is always a good choice.

Claims Process in Commercial Insurance

In case of any damage or loss, you can notify the insurance provider via the available helpline options. The insurance documents would generally carry details of the claim process and this could vary across different insurers. Also, make sure to arrange all the requisite documents as mentioned in the insurance policy. Here are some basic tips around the claims process for commercial insurance:

  • Immediately inform the insurance company providing the details of the damage or loss.

  • Ensure to provide basic details such as the policy number, claim form, and other documents as needed.

  • Furnish witnesses, proof, FIR copy, medical reports, etc, as applicable. This depends on the requirements defined by the insurer.

  • Upon receipt of the policy documents or claim form, the company would send across a surveyor to verify the extent of the damage. 

  • Once accepted, the claim process is carried out as per stipulated timelines and if not found valid it may even be rejected.

Commercial Insurance Providers in India

A number of people are opting for commercial insurance these days as the risk of loss and damage has significantly increased. Here are some of the companies offering commercial insurance in India.

  • HDFC ERGO

  • Bajaj Allianz

  • Bharti AXA

  • New India Assurance

  • TATA AIG

  • ICICI Lombard

  • United India Insurance

Benefits of Commercial Insurance 

  • Provides bodily injury coverage - In case the business or its operations causes injury to any other person, then the liability insurance covers for the bodily injury caused.

  • Provides property damage coverage - In case the business or its operations causes damage to other party’s property, then the property damage coverage in the liability insurance, covers for such loss.

  • Helps minimise the financial losses - Having business insurance in place helps the business to reduce financial losses when an unfortunate event occurs.

  • Helps promote business continuity - An unforeseen event can hit any business, and if the company does not have a commercial insurance policy to help protect against such an event, it may lead to the end of the business if not properly managed. However, business liability insurance helps to minimise risks so that the business continues to operate and grow.

  • Aids in risk-sharing – In case there are losses in the business, the insurance company can come to the rescue. In an event where some business hits severe misfortunes, it may not be able to solely afford the cost of getting back on track and running again. However, in the case of an insured business, the risk is shared between the company and the insurance company.

Additional Reading: What is term insurance?

FAQs

  1. How can I cancel my commercial insurance policy?

You can request for policy cancellation within a period of 15 days from the date of receipt of the policy document as long as there have been no claims made during such time period.

  1. Is it necessary to have commercial insurance?

It is not compulsory to have commercial insurance but it can prove to be helpful in order to protect the business against any unforeseen circumstances.

  1. Can I purchase commercial insurance online?

Yes. You can explore a variety of commercial policies online by visiting the insurer’s website. Most of them also allow online payments for premium payments.

  1. What if I want to renew my commercial insurance?

Customers can get their policy renewed through visiting the official website of the insurance provider and enter the username and password for login. After this, make payment for the premium amount. You will receive the notification regarding the successful renewal of the policy on the registered mobile number and E-mail ID.

End Note

Running a successful business does come with some inherent risks. A natural disaster can ruin things, there could be thefts, damage, etc. For these and many other reasons, it is essential that a business has a commercial insurance policy in place to protect itself as well as its assets.