What Insurance Policies Does Your Business Need?

Insurance is a valuable tool that businesses can use to protect themselves from the multitude of risks they face on a daily basis. Some types of insurance you have to take out by law such as Motor Insurance Policy while some you may need as a condition of a contract such as Goods in Transit.

Below are key Insurance Policies that will protect your businesses and they include:

Liability Insurance
There are various categories of liability insurance you might want to consider, depending on the nature of your business and they include:

  1. Public liability insurance: This is designed to provide protection to an organisation against legal liability to members of the public. In particular, it reimburses costs incurred due to legal action taken as a result of losses, damage to property, injury or even death caused by negligence on the part of the insured. 

  2.  Product liability: This type of insurance covers damages caused by products a company supplies and related legal and court costs. It’s often bundled together with public liability insurance or provided as an add-on. No matter how much care you take, it’s impossible to completely avoid the risk that your products will cause harm. So whether you are a retailer or a manufacturer, if your company sells products, product liability insurance provides invaluable protection. 

  3.  Professional liability: Specifically designed to protect service providers from legal expenses resulting from customers suing for errors, negligence or malpractice, professional liability insurance. It’s particularly relevant for providers of professional services, such as lawyers, accountants and business consultants. 

  4. Employer’s liability insurance: The Work Injury Benefit Act (WIBA) in Kenya came into force in 2007 to help employees obtain compensation for work-related injuries and illnesses. The Act made it compulsory for employers to have insurance in place, from an approved provider, to cover related claims from employees. It’s also worth noting that WIBA insurance usually only covers compensation for accidents and injuries that come about during working hours. WIBA Plus policies are available to extend the coverage to include time outside work. 

  5. Director’s and officer’s liability: This class of liability insurance provides protection for the business leaders themselves. As well as protecting them from the financial impact of personal lawsuits, it can provide a financial cushion if they lose their job as a result of a particular decision or action. However it also provides protection for companies, enabling them to recover money they may spend helping a senior staff member defend their case in court. 
Motor Commercial Insurance 
This type of Policy covers loss or damage to the vehicle including legal liability to third parties in respect of death, injury or property damage arising from the use of the motor vehicle. 
 
Fidelity Guarantee Insurance 
This insurance covers organizations against financial loss caused by dishonest or fraudulent acts of employees. Cover may be extended to incorporate computer crime and loss perpetrated by third parties may also be covered. 
 
Cash in Transit 
Cash in Transit is an insurance policy that covers against loss of money while in the insured premises locked in a Safe, in transit en route to a final destination and while in custody of an authorized employee. 
 
Goods in Transit 
Goods in Transit Insurance policy cover for loss of or damage to property belonging to the insured or for which the insured is responsible arising from any accident or other perils while in transit by any conveyance specified in the policy e.g. Road, Rail, air. This policy is essential for businesses that rely on the movement of goods to make a profit, such as manufacturers, distributors, and retailers. 
 
Property insurance 
Property Insurance is equally relevant whether your business owns or leases its premises. Coverage is available for specific items, from electronic equipment to goods in transit. You can also choose to address specific risks, from fire to terrorism, or go for open perils cover, previously known as ‘all risks’, which covers losses or damage due to any cause other than those specifically excluded. 
 
Fire Industrial Insurance 
This type of policy provides cover against loss or damage to property caused by fire, lightning and explosion. This insurance covers assets such as buildings, plant and machinery, stock insurance, furniture fixtures and fittings and office equipment.
 
Business interruption insurance
This is designed to protect an organisation from the financial losses it could incur as a result of a disaster interrupting business as usual. Policies generally provide cover such as increased costs of working and accountants’ fees incurred in preparing a claim, as well as negative impact on profit. Business interruption insurance is particularly relevant for companies, such as a retail shop. 
 
Cyber risk insurance 
With IT systems becoming increasingly integral to running a business, it’s not hard to imagine the impact a technical disaster could have on a growing company. There is however Cyber risk insurance available specifically designed to protect companies from losses incurred due to cyber security issues, including system damage caused by viruses, hacking, malicious employees or simply by accident. 
 
Should you wish to identify which Policy would best suit your company, note to seek legal advice and engage the relevant persons in undertaking the said process. 
 
Should you require any assistance, please do note hesitate to contact info@hmsadvocates.com

Senior Partner

Legal Trainee