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Business Insurance?



What Is Business Insurance?


Business insurance coverage will protect your business from any loss you may incur during your day to day operations. There are many types of business insurance, including coverage for legal liability, employee risk and property damage. As a business owner, you must determine your insurance needs based on your exposure to potential danger. Such as this may depend on the activity you conduct or the environment in which you operate.


Small business owners must carefully assess their business insurance needs to protect themselves from personal liability in the event of a loss. New business owners are tackling several responsibilities at once, often. Therefore, it is smart to seek the advice of a knowledgeable insurance agent to determine the type of business insurance you will need. Business insurance can range from professional liability insurance, property insurance, home-based business insurance, product liability insurance, vehicle insurance and business interruption insurance.


Why Do I Need Business Insurance?


Business insurance, as known as commercial insurance, can protect business owners from financial loss resulting from property damage, accidents, injury claims or even lawsuits. Primarily, business insurance will ensure that your company can continue to operate after suffering a significant financial loss, such as property damage due to a fire or natural disaster, or bodily injury resulting from accidents. These losses can be extremely costly and easily bankrupt a small business.


In Malaysia for example, The Insurance Services Malaysia Berhad (ISM) reported that on fire insurance for 2018 revealed that 829,466 fire (material damage) policies and 7,319 policies for consequential loss (loss of profits) were issued.

This shows the risk is there and that many small and medium-sized enterprises should protect themselves and their employees in the event of emergencies such as fire, flood or an act of terrorism.

In the UK, research also indicates that “80% of businesses affected by a major incident close down within 18 months, and 90% of those who lose their data are forced to close down within two years,” according to the British Insurance Brokers’ Association (BIBA).

Business insurance is not meant to cover small, day to day losses, such as slight mishaps or minor property damage, that can be easily absorbed by a company, which is why most commercial policies, much like auto or medical insurance, have deductibles. Standard insurance policies may cover more massive losses resulting from water damage, fire or serious accidents, however, it is important to note that some natural disasters like earthquakes and floods may not be covered under standard property insurance policies. Coverage for these unforeseen events is often provided under specific insurance policies at an additional cost.


In view of this, SMEs must look towards insurance – not only as a means of protection but also essential towards ensuring their longevity. A fire insurance policy usually covers property against losses or damages caused by fire or lightning, and explosion resulting from domestic gas.


Allianz General Insurance Company (Malaysia) Berhad (Allianz General)’s fire insurance can be extended by, paying an additional premium, to cover the following risks – aircraft damage, earthquake and volcanic eruption, storm, tempest, flood, explosion, impact damage, bursting or overflowing of water tanks apparatus or pipes, bush/lalang, subsidence and landslip, spontaneous combustion, riot strike and malicious damage and damage by falling trees or branches and object.


Meanwhile, Inconvenience Relief Benefit (IRB), underwritten by Allianz General is a simplified version of the Fire Consequential Loss insurance curated to complement the fire insurance and suit the needs of SMEs.


SMEs can claim for IRB when:

• There is a loss of more than 15% of the building’s sum insured or

• Losses that prevent access to the premise over 72 hours after the loss.

More importantly, Allianz General also has a provision offering a minimum payment of RM2,500 even if the insured’s loss does not meet the conditions above.

The policy also makes it easy for SMEs to make an insurance claim, as it does not require documentation on the company statement. This is unlike Fire Consequential Loss insurance.

It also applies a simple calculation on premium based on the insured selected plan. It employs a quick and straightforward claim process, as claims will be paid based on the sum insured.

IRB is perfect for SMEs as it covers:

• Micro firms: sales turnover of less than RM300,000 or employees of less than five.

• Small firms: manufacturers with sales turnover between RM300,000 and less than RM15mil or employees from five to less than 75/ Service and other sectors with Sales turnover from RM300,000 to less than RM3mil or employees from 5 to less than 30.

• Medium firms: manufacturers with sales turnover from RM15mil to not exceeding RM50mil or employees from 75 to not exceeding 200/ Service and other sectors with ales turnover from RM3mil to not exceeding RM20mil or employees from 30 to not exceeding 75.


Allianz General Insurance Company (Malaysia) Berhad Commercial Business head John Yep said SMEs must look at the bigger picture when it comes to insuring their business:


“The reality is that SMEs do not have adequate coverage. A majority opt for fire insurance but forgo protecting possible financial loss and investments. It is understandable small or medium-sized businesses would not have an abundant amount of financial reserves. So, it begs the questions, is insurance a luxury or a necessity?”


“Essentially, Allianz General’s Inconvenience Relief Benefit provides SMEs immediate relief in the event of a fire and other covered perils. Our aim as insurers it to provide a safety net so SMEs can continue to operate as usual and bounce back from such calamities. Besides that, the flexible benefits allow more room for adequate coverage for your business, ” added Yep.


Benefits Of Inconvenience Relief Benefit:

With the Inconvenience Relief Benefit, SMEs are offered insurance protection for the income they would have earned if the business were operating as usual, during the duration of repair work.


Instead of a one-size-fits-all policy, the IRB offers flexible benefits to suit different needs. IRB benefits range from benefits paid per day for the duration of repair work between RM500 for 30 days (minimum) to RM2,000 for 180 days (maximum).


For a full scale of the benefits offered by Inconvenience Relief Benefit, refer to the table below:

Currently, as per today, the Inconvenience Relief Benefit is covering for COVID-19 as well. For full details or more information, contact us at 016 820 1133 or email ask@lionellye.com.


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