Insurance is a reliable approach for businesses and organisations, and individuals to managing many forms of risk. Insurance is a legally binding arrangement between two parties by which a company (the insurer) agrees to pay a determined sum of money to the other party (the insured) at the end of a certain period or at the occurrence of an event.
The insurer promises to indemnify the insured for losses, to provide other pecuniary benefits on their occurrence or to render services connected with a risk.
Two main classifications of insurance in Ghana are Government or state insurance and Private Insurance. Government insurance deals with social security while Private insurance which has life and general categories,deals with life and other forms of insurance. In this post, we look at some types of private insurance that a small business owner should have.
1. Life Insurance
Life insurance protects your loved ones from financial loss on your death. When you take a life insurance, the insurance company, or simply the insurer, pays an agreed sum of money to a beneficiary you have determined upon your death. For that arrangement, you pay a premium usually in the form of periodic payments (monthly payments) in exchange for the payment of the benefits to the beneficiary. Having life insurance allows you to know that your loved ones will not be burdened financially upon your death.
2. Personal Automobile Insurance (Motor Insurance)
Automobile insurance covers all types of road vehicles. An owner of a motor vehicle is obliged to take a third party auto insurance. Third party insurance protects you from a liability that might rise from a collision. Normally Automobile insurance has a dual function: it protects one against both physical damage and bodily injury that may result from a crash or accident.
3. Commercial Auto Insurance
Commercial auto insurance protects business vehicles. You can use this type of insurance to protect vehicles that carry your products, raw materials, equipment or employees. Insuring your trucks, SUVs, vans and cars protects your business against loss and liability from damage and collisions.
This is insurance you take to cover your business building or personal property, including office equipment, computers, inventory or tools. Property insurance covers your property so that the insurer pays to restore your property in the event of a fire, burglary, theft, vandalism, etc.
5. Worker’s Compensation
This insurance helps an employer cover worker’s compensation to employees who get injured on the job. Worker’s Compensation insurance provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, the employee gives up his rights to sue his employer for the incident. As a business owner, it is very important to have worker’s compensation insurance because it protects yourself and your company from legal complications.
6. Health Insurance
This is a type of insurance coverage that covers the cost of an insured individual’s medical and or surgical expenses. The insured makes periodic premium payments to the insurer in order to benefit from the insurance cover in the event of a medical or surgical expense. Depending on the type of health insurance coverage, either the insured pays costs out of pocket, and is reimbursed or an employer makes payments on behalf of the insured directly to the provider.
Taking insurance cover for your business and yourself protects and others and helps you to overcome a loss. It is a very efficient way to manage and transfer your liability risks.