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    Guard Your Enterprises with Small Business Enterprise Insurance

    July, 2019 

    Small and Medium Enterprises (SMEs) sector has been recognized as an engine of growth in India. The contribution of small and medium enterprises sector to manufacturing output, employment and exports of the country is quite significant. According to estimates, in terms of value, the sector accounts for about 45 per cent of the manufacturing output and 40 percent of the total exports of India. Despite being pillars of economy the SMEs continue to face several problems in their day- to-day operations.

    SMEs are often unable to procure adequate financial resources for the purchase of machinery, equipment and raw materials as well as for meeting day-to-day expenses. Further, they find it difficult to recruit and motivate skilled managerial and technical personnel. This increases their vulnerability to various financial risks. Such risks can directly affect day- to-day operations, decrease revenue or increase expenses. Their impact may be serious enough for the business to fail.

    Most business managers know instinctively that they should have insurance policies to cover risks to life and property. However, these are generally considered as an expense that can be set aside unless mandated by law or their financiers or by contracts. Furthermore, there are many other risks that all businesses face, some of which are overlooked or ignored entirely.

    Each business has its own set of exposures that may derail its operations. Businesses should have a holistic way at looking at their risks by taking into consideration its operations, employees, and third-party exposures. SME insurance has an array of protection covers for various businesses with an option to choose the specific covers befitting each business needs and creating a customized package for the same. It works like a one-stop solution for almost all insurable risks that an SME may encounter. Coverage includes basic Fire & allied perils as primary cover along with host of additional covers. They include Burglary, Theft, Business Interruption covers, breakdown of Machinery and electronic equipment, all risks for portable equipment, employee Fidelity cover, employee Personal Accident cover, Money insurance, Public Liability & Workmen's compensation- an all in one package solution.

     

    Need to Protect Assets

     

    In addition to these a transit insurance can be looked at to protect loss of goods in transit both for domestic and export/ imports.

    Besides the need to protect the Assets of business enterprise, SME should be aware of the rise in liability exposures. Business enterprises are exposed to liability from Bodily Injury and property damage to third parties arising from their business operation, premises or products. These can be insured through a comprehensive Commercial General Liability insurance.

    Today's businesses operate in a fast-moving and dynamic environment. Management is closely involved in the day-to-day business operations and important business decisions have to be made on the spot. Such entrepreneurial environment can have a dangerous downside as well. Because the management is so closely involved in daily operations and is often making key decisions, small company owners and managers are extremely vulnerable to lawsuits from regulators, shareholders, customers, competitors, employees and government bodies amongst others for a number of reasons involving their positions in the company including Misuse of funds, Misrepresentation of company assets, Fraud, Breaking workplace laws, employee Discrimination, Wrongful termination, Sexual harassment etc. A costly lawsuit of this kind can have a particularly severe impact on individuals since the owner's personal net worth is often tied to the financial health of the company. There are policies which offer an easy way for small and medium-sized companies to secure protection for their Directors and Officers from such lawsuits and claims.

     

    The Vulnerability

     

    It's a common misnomer that only large companies are frequently exposed to data breaches, hacking incidents and network failures. The truth is, however, that there are thousands of small businesses handling sensitive information that could be exposed, leaving them liable to numerous claims. All it takes is one breach, whether it's as sophisticated as a hacking or as simple as an employee's laptop being stolen, to cost the business seriously. Cyber Insurance coverage comes in handy & protects businesses from the increasingly sophisticated and complex threats that are prevalent in today's tech-driven society. Any business that handles sensitive customer information, like credit card numbers, is at risk. If a breach or network failure happens, it could end up costing your small business lakhs of Rupees. As data & system breaches become more and more common, this insurance will grow to be just as vital to small businesses as policies that protect them from perils like fires, floods or riot incidents.

     

     





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