Last Updated –
What is Business Insurance?
In its most basic sense, business insurance protects businesses from potential losses brought about by risks involved in the normal course of business. This type of insurance protects a business’ financial assets, intellectual and physical property from things like:
- Property damage
- Loss of income
- Employee injuries and illnesses
Having business insurance can help your business survive in the event of things like natural disasters, data security breaches, customer injury, among other similar business crises.
Types of Business Insurance in the Philippines
As potential risks differ in kind and scale, there are different types of business insurance you should consider depending on your business. Below are some of the more common ones.
Business Owner’s Policy (BOP)
The standard BOP covers damage to property (brought about by things like theft, fire, and fortuitous events), and even business interruption, in some cases.
This is typically the type of insurance smaller businesses (50 employees or less) procure. It is designed to provide enough protection in case operations need to shut or scale down due to the damages.
This is sometimes also referred to as Property Insurance.
Workers’ Compensation Insurance
This mainly concerns workplace injuries, protecting your business as well as your employees by ensuring they receive medical treatment when a work-related accident occurs.
A Workers’ Compensation Insurance covers medical and health bills of employees in the event of a workplace accident and tens to boost employee morale and performance as it shows that you’re invested in them.
Group Life Insurance
As the name implies, this is life insurance provided by a business to its employees or members. Typically, the premium for a group life insurance is more affordable than individual insurance policies as the coverage is essentially purchased on a wholesale basis.
This is also usually offered as part of an employee’s benefits package. In most cases, the employer has ownership of the policy, with the coverage being terminated when an employee leaves the company.
Data Breach / Cyber Liability Insurance
In this digital age, a cyberattack could have very real financial consequences. A data breach could open the floodgates of a myriad of business problems that could not only damage a business’ reputation, it could also result in a dragging and costly lawsuit.
As such, an increasing number of businesses are protecting themselves with Data Breach or Cyber Liability Insurance from costs resulting in such digital attacks. These could include coverage for things like identity protection solutions, PR damage control, legal fees, and other liabilities.
While these are the main types of business insurance plans, there are other smaller plans that SMEs can procure. These include plans like vehicle insurance, equipment insurance, and general liability insurance.
For larger organizations, there’s even a plan called Key Man Insurance. This protects a business from the potential losses entailed by the demise of a person deemed irreplaceable by the company.
In this plan, the company is both the policy holder and the beneficiary. This also covers expenses like losses until a replacement is found, debts directly attributed to the loss of the key person, among others.
Why Do Businesses Need Insurance?
The quick answer is similar to why you would need any kind of insurance – it’s because unforeseen circumstances can happen at any time. And when these things occur, you want to have a buffer to help pay for damages that you would otherwise pay for out-of-pocket.
Here are some of the other reasons why you should get business insurance.
It protects your employees
As you saw in the section above, there is a type of insurance that covers things like medical care, missed wages, and funeral benefits should your employees suffer work-related injuries or illnesses.
It protects your customers
A Business Owner’s Policy combines business property and business liability coverage for things like property damage, personal and advertising injury, bodily injury, and product liability.
So if a customer suffers an accident in your place of business, your insurance can help pay for their medical expenses.
It builds credibility
When you have the proper insurance policies in place, it shows your customers, suppliers, and contractors that you’re serious about managing risks. This, in turn, bodes well for your credibility.
Some contracts require insurance
During the normal course of business, you will need to make different types of contracts. Some of these contracts require insurance protection. These include instances such as:
- Renting a building
- Borrowing money to finance goods
- Loan agreements
- Client agreements
It can help recruit employees
If you’re offering life insurance as part of your employee benefits package, then it will certainly be a positive for your organization when potential employees look at what you have to offer.
These, among a myriad of other benefits is why you should protect yourself from the unforeseen whenever you can.
Top Business Insurance Providers in the Philippines
Below are some of the most trusted financial institutions that provide a wide array of business insurance products and services to SMEs, startups, and enterprise-level companies in the country.
Much like the other providers on this list, Standard Insurance’s Biz Protect is a comprehensive policy that offers all kinds of protection your business could need.
It also caters to businesses of all sizes so you’re sure to find what you need and afford.
Here are some of the features & coverages of Standard Insurance’s BizProtect plan:
- RSMD – Riot, Strike, and Malicious Damage
- Property Damage (including vehicle impact, smoke, explosion, falling aircraft, and natural causes such as earthquakes, volcanic eruption, typhoon and floods)
- Robbery and Burglary
- Comprehensive General Liability Insurance
- Money, Securities and Payroll Insurance
- Personal Accident Insurance
- Electronic Equipment Insurance
- Extra Expense
You can download their brochure here.
This provider offers asset protection for businesses ranging from offices and restaurants to small kiosks.
Their policies are customizable, ensuring that you can get the protection that fits your needs.
This provider promises to have the right solutions for store owners and entrepreneurs.
Their offerings include business establishment insurance that comes with free additional benefits such as personal accident, general liability, and money insurance coverages.
AXA’s comprehensive Business Security package is exactly that – comprehensive. From protection against acts of nature and property insurance, to alternative accommodation and money, securities and payroll, and fidelity guarantee – AXA has got you covered.
You can get a quote here.
BDO Insure claims to be the country’s leading insurance broker. It teams up with local and international partners to create various types of insurance for businesses designed to help every aspect of the organization – from its employees and properties, to its liabilities.
A world-renowned name in the insurance field, AIG Philippines Product Pack brings the global capabilities of the company to its clients through unique services and tailor-made solutions specific to the needs of Philippine businesses.
Tips Before Getting Business Insurance
Go over your assets
This is a simple yet important first step when looking to get insurance protection. Some recommend starting with your human capital and signing up your business with a basic health plan. In certain circumstances, being a PhilHealth member is required.
Of course, you also need to look at all the physical assets you have – from your properties and equipment to vehicles used in the normal course of business.
Check if you have industry-specific insurance
It has become standard practice for providers to tailor niche products for popular high-risk industries such as marine, energy, construction, and manufacturing. If you belong in industries that have niche insurance products, you may want to check out how it compares to standard policies.
If you don’t fall under any of the special products offered, base the standard insurance plan you’ll get from your employees, physical assets, and your target customers.
Look at all offers from providers
If you’re a startup with very few employees, covering your employees with government agencies SSS and PhilHealth usually suffices. The websites of different providers usually have a quote tool readily available for those looking to inquire.
But if you want to dive deeper into the nitty-gritty of the policies, it would be best to speak with the providers’ agents as they would be more than happy to discuss specifics with you. And if you want a professional opinion, you can get the help of an insurance broker for a fee.
You want to make sure that you understand the extent of the protection you’ll be getting so when something comes up, you have the peace of mind that it’ll be taken care of.
How to Make A Claim
Each insurance provider will have their own policy when it comes to filing a claim, but there are some general steps you will need to make when filing a claim.
What you insured needs to do:
- Immediately notify the insurance company and provide them with the full particulars of the claim – this includes copies of the incident report, summons/complaint, and other pertinent documents.
- Never admit or deny liability, negotiate or make any admission, offer promises or payment for any incident/accident without the written prior consent of the insurance company.
- Fully cooperate with the authorized representative of the company in the conduct of investigation.
- Refer all letters and communications to the insurance provider.
Documents to be submitted:
Again, note that this may vary depending on the insurance provider.
- A written report/affidavit of accident stating the circumstances of the loss. This includes the person/s involved, as well as the first person/s who discovered the incident.
In the event of a third-party claim:
- Complaint/demand letter
- Incident report (This could be a security or police report)
- Photos of the damaged property
- Estimate of repair/replacement
- Additional documents that may be requested
In the event of third-party bodily injury claim:
- Incident/security report
- Complaint/demand letter (if any)
- Medical report/certificate
- Doctor’s prescription, hospital or healthcare provider’s statement of account, medical invoice or official payment of receipt
- Any additional documents required
In the event of third-party death claim: (in addition to the above-mentioned documents)
- Death certificate
- Post-mortem report
- Burial certificate
- Invoices and/or official receipts to support the burial expense
- Any additional documents
Notes on settlement of claims:
- Settlements are usually based on the actual costs incurred in the treatment of third-party bodily injury or cost of repair/replacement of damaged third-party to its original state prior to the incident.
- Financial loss suffered by a third-party, subject to presentation of relevant documents.
- Awards and/or consequential consideration as ordered by the relevant courts (excluding uninsurable awards)
- Any award/compensation/settlement agreed by all parties
- How to Buy a Business in the Philippines
- How to Sell a Business in the Philippines
- The Ultimate Guide to Business Valuation in the Philippines