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Corporate Insurance Plan
A corporate insurance plan is a type of insurance policy that offers coverage to a large organization or business in terms of particular operational risks, such as financial losses, sudden accidents, incidents of theft, etc. In this context, the protection benefits are subjected to a specific set of restrictions. All the actions that are not covered by the corporate insurance policy are accountable to the corporate managers.
Companies who care about the good health or fortune of their employees often prefer to embrace a corporate insurance plan as it provides great benefits not only to the employees but also to the business itself. Earlier considered as a common expectation, a corporate insurance plan now emerges as a remuneration package with schemes oriented towards employees’ wellbeing.
What Are The Types Of Corporate Insurance Plan?
Contractors’ All Risk Insurance:
Contractors’ all risk insurance provides suitable and comprehensive protection against the loss or damage caused due to contract works, construction machinery (for example, construction plants and equipment), execution of civil engineering projects, etc.
Besides providing such financial protections to all parties involved (such as architects, engineers, and financers), contractors’ all risk insurance contributes to mitigating overall construction expenditures.
Jewelers Block Insurance:
Jewelers block insurance provides coverage for loss or damage to jewelry items made up of gold, silver, pearls, precious stones, etc. Moreover, it covers the damage or loss of cash and currency notes in the jewelry company caused due to the fire, burglary, explosion, riot, terrorism, housebreaking, etc.
Cyber Crime Insurance:
Cyber insurance provides significant protection against financial losses caused by cyber frauds, such as unauthorized online transactions, e-mail spoofing, virus dissemination, hacking, cyberbullying, e-extortion, web jacking, cyberstalking, data diddling, hurting e-reputation, phishing, and so on. One can have cyber protection against various risks for the self as well as the family members.
Product Liability Insurance
Product liability insurance is meticulously designed for the business which manufactures products and goods for mass consumption. Regardless of the fact that the manufacturer is confident of the product being flawless and safe, the product might end up harming someone in many ways. Therefore, the best option to protect against such unexpected incidence is to purchase product liability insurance for your manufacturing business.
Carrier Legal Liability (CLL) Insurance:
Carrier legal liability insurance covers all the expenses of damage or loss of carrier goods or merchandise, provided that, it is caused due to fire, explosion, accident on account of negligence, and criminal acts. The vehicle, in which the actual transportation was taking place, as well as the goods or merchandise, must be registered under the policy.
Public Liability Insurance:
In case any third-party liability emerges out of property damage or injury, public liability insurance provides optimum protection against the financial burden on your business. For this reason, the plan is also known as ‘Third Party Insurance’.
For instance, a customer visiting your company might be stuck in the lift and get hospitalized due to suffocation. In such a case, the liability may arise out of injury or loss. This gives us the reason why public liability insurance is necessary for your business.
Director & Officer (D&O) Liability Insurance:
In case the director and officers of a company are subjected to legal charges against serving as a director or an officer in another type of organization, the D&O liability insurance provides multifaceted protection against personal losses.
In addition, the plan covers the legal fees and various other expenses that may emerge in association with the suit.
Professional Indemnity (PI) Insurance:
In case the client of an organization claims the service to be inadequate, the professional indemnity insurance provides comprehensive protection to the business owners, self-employed person, and freelancers.
This commercial policy is specifically designed for tackling the charges against the organization or any professional service provider if the recipient of the services is dissatisfied with the work. Thus, the plan inevitably protects the business from certain mistakes and negligence claims.
Commercial General Liability (CGL) Insurance:
Commercial general liability insurance provides protection against the liability cost arising due to bodily injury, loss, and damage caused by business products and operations in the business premises.
Although the plan does not cover all the risks that a business may face, it is still considered inclusive business insurance because it works as a perfect amalgamation of product liability and public liability insurance.
Bankers Indemnity Insurance:
Bankers indemnity insurance is a policy specifically designed to protect banks from money or security loss on-premises due to various threats, such as fraud, forgery, and dishonesty. In particular, the bankers indemnity insurance plan is a blend of various essential coverages to keep banks working smoothly and safely.
Erection All Risk (EAR) Insurance:
In case of the damage or loss caused due to the erection or installation of machinery, business equipment, and plant, the erection all risk insurance provides greater protection to the business in terms of bodily injury and property damage.
For instance, while installing business equipment, the wall of the nearby house fell. If your company has the EAR plan, a certain amount of coverage will be offered to you to cover up the damage to the property and loss of life, if any.
With the medical expenses skyrocketing day-by-day, group mediclaim policy becomes the best way to provide health benefits to your employees as well as their family members.
Under the policy, a certain amount of expensive medical treatment costs are covered in case of accidental injuries or hospitalization due to an illness.
Group Term Insurance:
A group term insurance provides coverage to a group of people. The main objective of the plan is to guarantee monetary benefits to the employees or group members, in case the insured person dies. Group term insurance plan acts as a master contract because it is purchased by an employer or the group head.
Group Personal Accident:
Group personal accident insurance plan protects the group members or employees against death or disability caused due to an accident. The plan is one of the most common corporate insurance plans purchased by the board members of a company, employers, or the employees’ owner. Based on the number of members included in a group, the group personal accident plan offers various discounts and benefits.
Workmen’s compensation plan is considered a social insurance plan because it solely depends on the social contract signed between the laborers and the management. The plan provides various medical as well as wage-related benefits to the workers who become ill or injured while doing work. Although the coverage is mandatory all across the country, the medical benefits under the policy may differ from state to state.
Fire insurance is a kind of policy or plan that binds the insured person with the insurance company through a legal contract. In case of loss or damage incurred by fire eruptions or accidental fire cases, the insurer provides adequate coverage in exchange for an annual premium.
Burglary insurance recompensates to the damage or loss of the insured items and property caused due to burglary attempts in the company’s premises. The insured property may be cash, coins, jewelry items, furniture, equipment, confidential documents, commercial vehicles, etc.
Thus, this voyage policy is no more than a haven for a plethora of shipping companies and couriers as it provides protection against unexpected expenses occurring while transporting goods or items by water.
How Does A Corporate Insurance Plan Work?
- Buying Suitable Policy: As per the needs and preferences of the employees, the employer or the group head purchases a suitable corporate insurance plan. In an employer-employee group, the employer will be the policyholder and the employees will be the group members.
- Paying For The Policy: The company or organization now pays a premium for the policy. Usually, two types of plans are provided to the employees to choose from, contributory and non-contributory plans. In contributory plans, the employees partake in paying premiums with nominal amounts, and the rest of the payment is done by the employer or the business owner. Whereas, in non-contributory plans, the payment is wholly done by the employer itself.
- Assessment & Determining The Sum Insured: Based on nature, age allocations, and composition of the group, the policy provider determines the sum insured for each employee.
- Issuing The Policy: Once the policyholder pays the premium and the sum insured is calculated, all the members of the group are covered under one plan for the respective time period from the date when the policy was initiated.
- Dispensing The Benefits: The employees can leverage various coverage benefits under the plan. For instance, if the company has been issued a group health insurance plan, then the employees registered under the policy are subjected to various health benefits, such as critical illness cover, pre- and post-hospitalization coverage, chronic illness cover, etc.
- Renewal & Amendments: After the tenure period of the policy expires, the policyholder can renew the plan. In case the company wishes to include a newly added member in the plan or increase the sum insured amount, an additional premium cost is charged, which is usually quite nominal.
What Are The Salient Features Of A Corporate Insurance Plan?
- Premium Rates That Meet The Budget
The premium rates of a corporate insurance plan are relatively lower than individual plans. This is because the overall risk disseminates across all the group members, making it more economical to avail various lucrative perks of the plan.
- How Long Does The Plan Last?
Once the employee leaves the company or any corporate organization, most of the corporate insurance plans become invalid.
Therefore, unlike individual plans that continue to operate even after the employee leaves, a corporate insurance plan is more likely to come with certain job limitations that could not be denied.
- Tailor-Made Solutions
Many of the corporate insurance plans come with the feature of customization as per needs and preferences. For instance, a group health insurance plan provides comprehensive coverage to the employees along with the options for add-ons that come with additional advantages.
- What Damages & Losses Does The Plan Cover?
On a general basis, a corporate insurance plan covers the loss or damage caused due to the following reasons:
- Theft: In case the products or items registered under the plan is confiscated.
- Natural Calamities: In case the damage or loss is done by any natural disaster, such as earthquake, lightning, flood, tsunami, etc.
- Fire: In case the damage or loss is done due to the fire eruption in the company’s premises.
- Negligence & Errors: In case any kind of negligence or error from the company gives rise to liability.
- Absolute Legal Protection
Regardless of the fact that whether or not something wrong is done on the company’s behalf, a corporate insurance plan serves thorough lawsuit protection to the company.
For instance, your company’s product causes harm to an individual and he files a case against your company. In such cases of unprecedented legal implications, a corporate insurance plan becomes a wise decision to get fully insured in legal terms.
What Benefits Can A Corporate Insurance Plan Provide?
- Creates Protective Shield Against Potential Risks
A corporate insurance plan covers damages and losses arising due to theft, fire, accidents, employee unrest, negligence, and mistakes, etc. Therefore, the plan acts as a risk management tool that transfers the risks associated with the loss to an insurance company, that too, with nominal premium rates.
- Helps You In Building Trust
The credibility of your company or business increases when it is protected by a corporate insurance plan. When the employees know that there is some financial protection if anything wrong happens, then they tend to perform better. Besides, your customers also start trusting your brand because they know that there are strict provisions for any error or negligence.
- Act Of God? – Protect Your Property
A corporate insurance plan also provides extensive protection against unpredictable events that are out of human control, such as earthquakes, hurricanes, lightning, floods, storms, etc. The losses and damages caused due to such natural calamities will be covered over time.
- Saves Your Pocket
Lower premium rates, compensatory benefits, and protection against the loss or damage of money or property– all such aspects assist the company to save a great deal of money.
In addition, as a corporate insurance policy allows all the group members to come under a single plan, it mitigates the expensive costs associated with purchasing individuals policies.
- How Does The Plan Lift Employees’ Morale?
Generally, corporate insurance plans primarily aim to facilitate the employees’ well-being and healthcare. Having a suitable plan will lead to greater job satisfaction and increased motivation among the employees.
Moreover, it will reflect that you, as a company owner, values their contribution and wishes to keep your staff on board. In this context, a corporate insurance plan will boost employees’ morale, which in turn enhances organizational performance.
- Attracts Good Talents
The majority of the candidates prefer to work with companies that are insured by a suitable corporate insurance policy. Some clients make a specific statement in their curriculum vitae that they will work only with the properly insured companies. Thus, with the absence of such a plan, you may lose some of the good talents.
- How Can You Protect Your Physical Assets?
In case the damage or loss is caused to the physical assets of a company, such as a furniture, computers, confidential documents, etc., a suitable corporate insurance plan assists you to cover the loss. The catastrophe can be caused due to theft, robbery, terrorist attacks, etc.
- Financial Relief To Employees
Employees are true assets of your business. Thus, protecting them against financial risks becomes a pivotal option for any business or company.
Regular health checkups, support at the time of medical emergencies, health coverage to family members, and benefits in terms of disability and death of the insured person – all such financial reliefs provide fresh air to your employees and make them rely on your company.
What Is The Claim Process?
The company can get the sum insured by following the below steps:
- Filing A Claim: The business or company will file a claim at the time of loss or damage. For instance, if a natural calamity destroys a portion of the company’s premises, then the company will file a claim to the property insurance provider.
- Submitting Documents: The company has to submit all the essential documents, such as property insurance copy, original death certificate (in case of group health insurance), etc.
- Assessing The Damage: The insurance company will assess the damage or loss accordingly.
- Settling The Claim: The insurance company will then provide an appropriate amount of compensation for the damage or loss caused to the person or material things registered under the policy.
What To Consider Before Buying A Corporate Insurance Plan?
- How Much Risk Can You Take?
Before purchasing any corporate insurance plan, it is very important to assess your risk appetite or the level of risk to which your business is exposed. It is only on the basis of your risk factor the insurer will determine whether or not to cover your business.
Beware Of Forthcoming Issues
Whatever is the extent of coverage, you should always be cognizant of the potential challenges. While buying any corporate insurance policy, one can take the help of insurance experts to know about the issues that may arise in the future.
- What Are Your Insurance Needs?
With the growth and expansion of your business, liabilities also rise. In case you are met with an unexpected disaster, you certainly do not wish to be uncovered. Thus, it is extremely important to not only determine but also to review your insurance needs.
- A Proper Research Is The Key
One should not just buy a random plan for the business or the company. Although insurance experts can suggest you many plans, proper research should be done by the company owner.
- Which plan is most suitable for your company?
- Who will be your agents? Are they reputed or not?
- How much will be the sum insured?
- What will be the extent of coverage?
Yes. In case you wish to protect both your employees as well as the physical assets of your company, you can choose to have a group health insurance and property insurance policy.
In such a case, the insurance company will re-assess the risk factor to provide you with additional protection and benefits.
Corporate insurance plans are usually limited to your employment period. Once you leave the company, the plan expires for you.
However, companies and businesses which give choices of having individual policies during the employment period are subjected to operate even after you lose or leave the job.
Yes. As per the Income Tax Act, 1961, both the employees as well as employers can leverage tax deductions in various types of amounts. For instance, under Section 10 (10 D), employees’ death benefits are exempted from tax.
The answer to this question differs from one insurance company to the other. Moreover, it also depends on what type of plan you are purchasing. Some corporate health insurance plans do not provide NCB benefits to the company.
Yes, the plan covers the flood damage, provided that your company must have a separate Force Majeure (Act of God) insurance policy for the coverage.
You can get a corporate insurance plan via online or call an insurance company agent for the same. They will help you in finding the best plan available that suits your budget and needs.