What are the different types of car insurance? 

THERE ARE THREE CATEGORIES OF VEHICLE INSURANCE COVERS.

1.Third party cover(TPO)- It covers damages, injury or death caused to the third party. When your car is insured under a third party cover, it means that if you get into an accident, the insurance company will only pay for damages to third party property such as buildings and cars or injury to the third party and not to yourself or your car.

When involved in an accident the insurance protects the other driver and passengers in case of bodily injury, permanent total disability, and death. In case of an accident, it will help cover damages to the property.

2. Third party, fire, and theft(TPFT)- car insurance covers you for any damage made to a third party, their vehicle, or property due to an accident. It also covers you for damage caused by fire or having your vehicle stolen. Third party, fire, and theft does not cover your own vehicle if it's damaged in an accident.

 3. Comprehensive cover(comp)- A comprehensive insurance cover offers financial security in case of a road accident or in case your car is stolen, damaged due to fire, riots or natural disasters like floods. This cover also offers third party benefits such as damages to other people's properties like vehicle or buildings, injuries and death.

comprehensive car insurance cover – sometimes known as fully comprehensive cover, pays out if you damage your car, someone else's car or injure someone in an accident, regardless of who is at fault. Comprehensive car insurance also covers you against fire and theft. So, in short, while comprehensive car insurance in Kenya does not typically cover the driver or immediate passengers in the event of an accident, you can take out additional insurance policies to provide this type of coverage.

The standard comprehensive insurance policy does not cover passengers in the insured vehicle policy. This applies to both commercial/transport as well as private vehicles. In case of an accident, there is a possibility that passengers can be injured or even lead to deaths. As the name suggests, Motor Vehicle Comprehensive policy only protects damage or loss to the motor vehicle and any claim made by the third parties.

Windscreen(front and rear) and radio cassette are covered at certain limit amount depending on the company andwindscreen is NOT subjected to assessment, excess amount and police abstract documentary(any cost is replaceable).The difference between the actual value of the windscreen/radio and the company limit is covered with an additional premium of ksh.1000 at any 10,000 range. All vehicle parts subjected to wear and tear requires client contribution at the time of repair. All pre-existingdamaged parts or cracked parts of the vehicle require a client contribution during repair.

NOTE: the damage must be reported to the insurance or Agent within 24hrs of the accident. 

WHAT IS EXCESS PROTECTION/WAIVER IN INSURANCE?

 The excess charged by most car insurance companies is 2.5% of the value of the car. Motor insurance companies also have a minimum value of excess. How does it work? The excess is an agreed amount of money that you as the client is liable to pay in event of a car insurance claim being settled .Excess protection insurance helps you recover the excess you've paid after making a accident claim or it prevents payment of excess amount. The Protector is utilized/exhausted upon first claim settlement within the insurance cover and the client is adviced to activate it again with an additional premium.  It's also known as insurance excess cover or excess reimbursement insurance. Excess protection is typically bought as part of a car, home, property or landlord insurance package. 

NOTE: Excess protection is only designed for road accident claims only but not theft, fire or PVT. Incase of theft, fire or PVT, a client will pay excess amount that depends on company rates for the claim to be honored.

 EXCESSES APPLICABLE

Accidenta Damage-2. 5 % of vehicle value min 15,000

Theft with antitheft devices:10% of vehicle value

Theft without antitheft devices: 20% of vehicle Value

Third Party Property Damage -20,000/=

Young Drivers- Below 21yrs - 2.5% of value

Novice below 24 months experience - 2.5% of value

LIMITS APPLICABLE

Windscreen Limit - 30,000-100,000/=

Radio Cassette Limit - 30,000-100,000/=

Towing Limit - 30,000-100,000/=

Third Party Property Damage – Ksh.5,000,000

Third Party Persons Injury/Death – Ksh. 4,000,000/20,000,000

Excess Protector Extension (Own Damage Excess)

Personal accident for the driver

WHAT IS POLITICAL VIOLENCE AND TERRORISM IN INSURANCE(PVT).

Terrorism and political violence (PVT) insurance covers an individual or company against physical loss and damage, as well as business interruption costs, because of a terrorist act or acts of political violence such as riot, strike, civil commotion, revolution, war, civil war, rebellion, insurrection, sabotage, coup d’état and malicious damage, and consequential looting. It can occur as a stand-alone cover or as part of another policy such as Motor Vehicle insurance or Home Insurance commonly called a rider. 

How Much Excess Does The Client Have To Pay Before The Car Can Be Repaired?Without Excess Protector

2.5% of Ksh 1,000,000 = Ksh 25,000
The client pays Ksh 25,000 out of their own pocket Ksh 25,000 before the car can be repaired.

With Excess Protector

2.5% of Ksh 1,000,000 = Ksh 25,000
The client pays Ksh 0. This is because the excess is more than the minimum amount of Ksh 15,000. So the insurance company pays for the full cost of the damages to get the car repaired.
Note : If the repair costs/expenses are below Ksh 15,000 the client is expected to pay the full cost of the costs. This is to reduce the abuse of the Excess Protector for small repair expenses.
So, the Excess Protector serves a major purpose to completely eliminate or greatly reduce the excess amounts paid by a client when a claim is raised

There Are 2 Types Of Excess Protector:Own Damage Excess Protector

This is applicable for claims for repairs to the insured vehicle arising out of a traffic accident. For private motor insurance in Kenya, this is normally set at 2.5% of the value of the car with a minimum excess value of KSh 20,000. Commercial vehicles and PSVs are set at 5% of the value of the vehicle and minimum excess value also at KSh 20,000.

Theft Excess Protector

This applies for theft of the insured car. It can apply to partial theft or total theft. Partial theft is when a part or parts of the vehicle are stolen but the not the vehicle in its entirety, commonly the side mirrors, tyres, front grill, wheel caps are stolen from parked vehicles in Kenya. Total theft is commonly executed using car jackings/robberies.

There are different excess rates for claims made for car theft, depending on the security of the car. Clients with cars fitted with Anti Theft Devices (ATD) or Tracking Systems pay smaller excesses in the event of car theft. Percentages for the excess liable vary from as low as 2.5% of car value to as high as 25% of car value depending on the security features of the insured vehicle.It is therefore advisable to fit one’s vehicle with the necessary security devices as it reduces the chances that it can be stolen and secondly, in the case of theft, the security devices make it easier to track and recover the vehicle. Finally as stated above, the owner of the vehicle is liable to a much smaller excess for the insurance claim in the event that the car is stolen 

No Blame No Excess

This is a common insurance principle which applies to car insurance in Kenya. When the insured/client is involved in road accident and the third party (other driver/vehicle) is to blame for the accident and this is captured and acknowledged in the police abstract. Here, the insurance company of insured/client will cover all the damages from the accident and the client does not have to pay any excess amounts. This is under the insurance principle of subrogation.
The insurance principle of subrogation is the legal principle under which an insured party surrenders its rights against a third party to the insurer after claiming and receiving a compensation for an insured loss.
Caveat : If the damage is below the excess amount, the insured/client is still expected to meet all the costs of the repairs.

Note:

Damage to the windscreen glass and the radio/entertainment system is covered separately on comprehensive car insurance policies. Therefore, the excess is not charged on the damages to the windscreen and car radio, the insurance company pays 100% of the claim expenses. Most insurers authorise the repairs to be done by the client and refund the costs there after so as to expedite the process. It is important to check what limits for the windscreen and radio cassette are provided by the motor insurance cover in Kenya before purchasing it, some insurers provide as low as KSh 20,000 while others provide higher limits up to KSh 100,000 for right about the same price.

The Excess Protector expires immediately after use. This means that if a claim is raised on a policy and the excess protector is triggered/used, then it will have to be bought again immediately for the remainder of the policy or at the renewal of the policy as per what the client desires

Does Insurance Cover Pre-Existing Damage?

Insurance policies do not usually cover pre-existing damages. Pre-existing damage refers to any damages that your vehicle already had before you bought your insurance policy. This may include previous damages that you didn't repair or normal wear and tear to your vehicle.

Your insurance company is unlikely to cover pre-existing damages for the following reasons:

They are not required to cover damages to your vehicle that occurred before you had a policy with them.

They do not have the facts they would need to make a determination on your claim.

If insurance companies covered pre-existing damages, their liability would likely increase significantly. This would, in turn, increase the average policy rates.

Can I Buy Insurance with Pre-Existing Damage?

While it may be possible to buy insurance with pre-existing damage, you will have to notify your insurance company of the damages(during valuation). This can lead to higher rates while also affecting any future claims you make. If you file a claim at a later date, they can use information from your application process. According to ConsumerLawPA.com, they can even use this information against you, potentially denying the claim.

Your insurance company may also question if the newer damage was due to a recent accident or if the pre-existing damage was its cause. Existing damage will also make it difficult to buy an insurance policy that includes comprehensive or collision coverage. These policies offer the following coverages:

Comprehensive: Comprehensive covers damages to your vehicle that are not due to an accident. This might include weather-related damage or theft.

Collision: Collision covers damages to your vehicle due to an impact on another vehicle or object. This includes accidents with other vehicles or if you were to run into a tree.

Because liability insurance is a requirement in most states, pre-existing damage should not prevent you from buying it. However, liability insurance only covers damages that you cause to another driver's vehicle. It does not cover the damages to your vehicle, so whether or not you have pre-existing damage doesn't matter as much. It is always important, however, to ensure that pre-existing damage is not making your vehicle unsafe.

Even if you can get insurance with it, making repairs to certain mechanical parts or the exterior structure may be important for safety purposes.

When Is an Inspection(valuation) Required for Insurance?

Several insurance companies require complete inspection before buying full coverage. During this inspection, they will take photographs and send them to the insurance provider.

The inspection will look at factors such as:

The vehicle's total mileage

The overall physical condition of the vehicle

Features equipped in the vehicle

Accessories or after-market parts

The general appearance of the vehicle

If there are any damages present

The inspection will also double-check that the details you provided when obtaining a quote match the actual description of the vehicle. This is done to reduce inaccurate claims, which can make full coverage more affordable for everyone.

 Failing to complete it within the time period will usually void your policy. Different insurance companies have different timelines, so be sure you know how long you have to schedule an inspection. Your insurance company will use the CARCO report to adjust your rates as needed. They will also use the report to guide future claims.

Minimal damage may not prevent you from getting insurance, but the provider has other ways to learn more information about your vehicle. They can use your vehicle's VIN to learn about its history. A VIN will track if the vehicle has been in an accident or has a salvaged title. This number, which is assigned to each vehicle, will notify them of any previous insurance claims in which the vehicle has been involved.

How to File a Claim with Pre-Existing Damage

While there is no guarantee that your insurance company will cover your damages if you have pre-existing damages, taking certain steps before filing can help you improve your chances:

Take photographs: Photographs can be good evidence if you have to file a new claim. You should take photographs of the pre-existing damage, as well as any new damages.

Work with a lawyer: If your insurance company denies your claim or won't work with you, you can find out your legal options by talking with a lawyer.

Work with the appraiser: When you file an insurance claim, the company will assign an adjuster to your account. Communicate with them and follow all their directions.

Maintain good vehicle records: In addition to photographs, it is also helpful to maintain good records. Keep track of any repairs you do receive, as well as other related maintenance.

Notify your insurance company of repairs: If you do decide to make repairs to pre-existing damages, notify your insurance company. It is important they have the most up-to-date information.

The more organized that you are with your records, the better your chances of having a claim approved with pre-existing damages. When shopping around for the best insurance rates, be sure to notify each insurance provider of the specific type and extent of damages for the most accurate rates.

The condition of your vehicle doesn't matter when buying liability insurance. However, if you want full coverage, you may have to undergo an inspection, and honesty will ensure you are properly covered.

Motor PSV Third Party Insurance and Passenger Legal Liability(PLL).

This covers the insured against third party liabilities for persons and property in the event of an accident. During underwriting managers meeting on 4th July 2023 KENYA, it was discussed that it is NOT mandatory to include the Passenger Legal Liability (PLL) that caters for the passengers. AKI circular released on 23rd oct,2023 allows removal of PLL from motor commercial certificates -B series hence forth except institutional vehicles and bikes.

But what is a legal liability to passengers' coverage? Legal liability to passengers coverage refers to limited coverage to you or the authorized driver from any legal liability for death or bodily injury of a passenger due to your or the authorized driver's negligence .

Incase of an accident, Do not accept liability

Knowing this should also act as a reminder that the same applies to you when you feel that the other party is to blame. Insurance companies will also warn you against accepting liability for an accident, because admitting liability may invalidate your policy. If the defendant's side denies liability, this means that they do not accept that the defendant was responsible for your accident. If the defendant fails to accept liability, the next most likely step in your case is to get supporting evidence to present to the defendant. 

The reasons why you should NOT admit fault when a car accident occurs

When you are involved in an accident, it is difficult to remember what you need to do as the whole situation is overwhelming. As a driver, it is important to know what mistakes to avoid when you are involved in an accident.
These mistakes may lead to a troubling insurance claim process and even legal ramifications. After the accident has occurred, it is likely you will be a bit shaken, confused and emotionally unstable. It is for these reasons that it’s important to keep the following vital things in mind. They will help you avoid making mistakes that could turn out costly in the end:

These are the reasons why you should NEVER admit fault after a car accident and the related consequences of doing so

If you blame yourself for the accident, don’t admit to being at fault to anyone at the scene. The law doesn’t require you to admit to being liable for the accident. Don’t allow the other party or witnesses to pressure you to admit being at fault. Knowing this should also act as a reminder that the same applies to you when you feel that the other party is to blame.

Insurance companies will also warn you against accepting liability for an accident, because admitting liability may invalidate your policy. It is important to let the authorities and insurance investigators process the evidence and determine who is liable; this may not sit well with your moral compass, but you do not know all the factors that played part in the accident.

After an accident, you are likely to suffer from shock, making it hard to take every detail into consideration.
In cases where you accept the liability verbally, one can still argue that they haven’t admitted to anything since it wasn’t in writing. However, this is risky as a witness could quote you in court or when the police are taking details of the accident report at the scene of the accident.

You cannot go back on your admission as it could be considered perjury. Perjury has serious legal repercussions and admission of guilt puts you at risk of losing any compensation from the car accident.
Sometimes it is close to impossible to refrain from admitting liability. In car accidents where there is:
• Minimal damage
• No clear injuries
• The cost of repairing the damage is relatively cheap

You may be tempted to accept liability for the accident. However, risks such as later discoveri

What Is Health Insurance?

Health insurance is a contract between a company and a consumer. The company agrees to pay all or some of the insured person's healthcare costs in return for payment of a monthly premium.

The contract is usually a one-year agreement, during which you are responsible for paying specific expenses related to illness, injury, pregnancy, or preventative care.

KEY TAKEAWAYS

Health insurance pays most medical and surgical expenses and preventative care costs in return for monthly premiums.

Generally, the higher the monthly premium, the lower the out-of-pocket costs.

Insurance plans have deductibles and co-pays, but these out-of-pocket expenses are now capped by federal law.

Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) are federal health insurance plans that extend coverage to older, disabled, and low-income people.

Health insurance agreements in the U.S. generally come with exceptions to coverage including:

A deductible that requires the consumer to pay certain healthcare costs "out-of-pocket" up to a maximum amount before the company coverage begins

One or more co-payments that require the consumer to pay a set share of the cost for specific services or procedures

why health insurance importantHealth insurance: How it protects you from health and financial risks

No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and offers many other important benefits.

Health insurance covers essential health benefits critical to maintaining your health and treating illness and accidents

Health insurance protects you from unexpected, high medical costs.

You pay less for covered in-network health care, even before you meet your deductible.

You get free preventive care, like vaccines, screenings, and some check-ups, even before you meet your deductible.

If you have a Marketplace plan or other qualifying health coverage through the plan year 2018, you don’t have to pay the penalty that people without coverage must pay

10 KEY HEALTH INSURANCE TERMS EXPLAINED

What are the conditions of a policy?

Policy conditions are the provisions in an insurance policy that often require the insured to comply with certain requirements to obtain coverage under the policy. Policy conditions can be overlooked because they are not in the insuring agreement, the exclusions, or the definitions.

Simply having the basic understanding of terms used in insurance can make the difference between having a plan that will cover you against potential risks and having a plan that will not meet your insurance needs.

This article will help you understand some of the common terms used in health insurance.

Annual Limit

This is the maximum amount of money your insurance company will pay for the benefits in which you are covered within a year.

Bed Limit

This refers to the cost of accommodation including the standard meals served by the hospital.

Chronic disease

This refers to a medical condition that has one of the following characteristics:

Has no treatment/cure

Needs prolonged treatment or management

Can change your body in a way that cannot be reversed

Dependents

Spouse and/or unmarried children of an insured who are eligible to be covered.

Exclusions

These refer to a set of conditions and/or services that are not covered in a health insurance plan. These conditions are stated in the medical insurance contract between the insured and the insurer also known as a policy document, and the insurance company will not cover any claim submitted for such conditions.

Inpatient

Inpatient care generally refers to any medical service that requires admission into a hospital or medical facility. Health insurance companies usually require you to be formally admitted into a hospital for a stay for a service to be considered inpatient. The cost shall be recovered from the members hospitalization benefit.

Lapse

This refers to the end of a policy once the period of cover has ended.

Outpatient

This refers to medical treatment or consultation that does not require a day admission or an overnight stay at a medical facility.

Provider network

This refers to a group of medical providers that have contracted with the insurance company to provide health care services. CIC Group has an extensive list of medical providers that can be found here >> https://cic.co.ke/wp-content/uploads/2021/09/CIC-Approved-Panel_of-Medical-Service-Providers.pdf

Sublimit

This is where certain and specified types of illnesses and conditions are not covered up to the full inpatient or outpatient limit the client has taken. For instance, if you have an inpatient cover limit of KES 1 Million, there are illnesses or conditions that are not covered up to KES 1 Million rather, they are covered up to KES 200,000.

While there are more health insurance terms than the ones outlined in this article, these are some of the most common definitions that will be of help when purchasing a health insurance policy.

How Health Insurance Works

In the United States, health insurance is tricky to navigate. It is a business with a number of regional and national competitors whose coverage, pricing, and availability vary from state to state and even by county.

About half of the U.S. population has health insurance coverage as an employment benefit, with premiums partially covered by the employer.1 The cost to the employer is tax-deductible to the payer, and the benefits to the employee are tax-free, with certain exceptions for S corporation employees.23

Self-employed people, freelancers, and gig workers can buy insurance directly on their own. The Affordable Care Act of 2010, commonly called Obamacare, mandated the creation of a national database, HealthCare.gov, which allows individuals to search for standard plans from private insurers that are available where they live. The costs of the coverage are subsidized for taxpayers whose incomes are between 100% and 400% of the federal poverty threshold.4

Some states created their own versions of HealthCare.gov that are tailored to their residents.

People over the age of 65 and those with disabilities, End-Stage Renal Disease, or ALS qualify to receive federally-subsidized care through Medicare, while families whose incomes are near the poverty level are eligible for subsidized Medicaid coverage.56

Types of Health Insurance

Health insurance can be tricky to navigate. In the U.S., managed care insurance plans require policyholders to get their care from a network of designated healthcare providers. If patients seek care outside the network, they must pay a higher percentage of the cost. The insurer may even refuse payment outright for services obtained out of network.

Many managed care plans—for example, health maintenance organizations (HMOs) and point-of-service plans (POS)—require patients to choose a primary care physician who oversees the patient's care, makes recommendations about treatment, and provides referrals for medical specialists.

Preferred-provider organizations (PPOs), by contrast, don't require referrals but do set lower rates for using in-network practitioners and services.

Insurance companies may deny coverage for certain services that were obtained without preauthorization. They may refuse payment for name-brand drugs if a generic version or comparable medication is available at a lower cost. Check an insurance company's rules before your buy their insurance.

What Are Copays, Deductibles, and Coinsurance?

Most health insurance plans require their customers to pick up some of the costs of their coverage in various ways:

The deductible is the amount you pay out of pocket every year before the insurer begins to meet the costs. This is now capped by federal law.7

Copays are set fees that subscribers must pay for specific services such as doctor visits and prescription drugs even after the deductible is met.

Coinsurance is the percentage of healthcare costs that the insured must pay even after they've met the deductible (but only until they reach the out-of-pocket maximum for the year).

Insurance plans with higher out-of-pocket costs generally have smaller monthly premiums. When shopping for plans, weigh the benefit of lower monthly payments against the potential risk of large out-of-pocket expenses in the case of a major illness or accident.

 If you're self-employed, you may be able to deduct up to 100% of health insurance premiums you pay out of pocket.8

High-Deductible Health Plans (HDHP)

One increasingly popular type of health insurance is the high-deductible health plan (HDHP). These plans have higher deductibles and lower monthly premiums. Their users are the only ones eligible to open a Health Savings Account (HSA) that has substantial federal tax benefits.

For 2024, a high-deductible health plan is one that has deductibles of at least $1,600 for an individual or $3,100 for a family. Total out-of-pocket maximums are $8,050 for an individual and $16,100 for a family.9

High-deductible health plans offer a unique advantage in that if you have one, you're permitted to open—and contribute pretax income to—a health savings account, which can be used to pay for qualified medical expenses. These plans offer a triple tax benefit in that:

Contributions are tax-deductible

Contributions grow on a tax-deferred basis

Qualified withdrawals for healthcare expenses are tax-free10

Note

You can withdraw money from an HSA after age 65 for any reason with no tax penalty, but you will pay income tax on the withdrawal if the money is not used for qualified medical expenses.11

Federal Health Insurance Plans

Not all health insurance in the US is provided by private companies. Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) are federal health insurance plans that extend coverage to older, disabled, and low-income people.

The Affordable Care Act (ACA)

In 2010, President Barack Obama signed the Affordable Care Act (ACA) into law. In participating states, the act expanded Medicaid, a government program that provides medical care for individuals with low incomes.

The Affordable Care Act has prohibited insurance companies from denying coverage to patients with preexisting conditions and has allowed children to remain on their parents' insurance plan until they reach the age of 26.12

In addition to these changes, the ACA established the federal Health Insurance Marketplace. It also prohibits insurance companies from denying coverage to patients with preexisting conditions and allows children to remain on their parents' insurance plan until they reach age 26.

The Marketplace helps individuals and businesses shop for quality insurance plans at affordable rates. Insurance available through the ACA Marketplace is required to cover 10 essential health benefits.12

Under the ACA, tax-payers were required to carry medical insurance that meets federally designated minimum standards or face a tax penalty, but the Tax Cuts and Job Act removed that penalty after December 31, 2018.13

A Supreme Court ruling in 2012 struck down an ACA provision that required states to expand Medicaid eligibility as a condition for receiving federal Medicaid funding, and a number of states chose to refuse to expand their Medicaid programs.14

As of 2023, an estimated 40 million people have health coverage through the Affordable Care Act.15

Medicare and CHIP

Two public health insurance plans, Medicare and the Children's Health Insurance Program (CHIP), provide subsidized coverage for disabled individuals and children. Medicare, which is available to people age 65 or older, also serves people with certain disabilities, End-Stage Renal Disease, and ALS. The CHIP plan provides health coverage for low-income children under the age of 19.516

 Medicaid can help older seniors to pay for long-term care in a nursing home, but Medicare does not. This is why Medicare recipients often pay for supplemental coverage through a private insurer.17

What Is Health Insurance and Why Do You Need It?

Health insurance is an agreement in which an insurance company agrees to pay for some or all of your medical expenses in exchange for a monthly premium payment. You need it to ensure you can pay for any medical bills while staying in good financial health.

Who Needs Health Insurance?

Everyone needs health insurance. Health insurance offsets the costs of minor medical issues and major ones, including surgeries and treatment for life-threatening ailments and debilitating conditions.

How Do You Get Health Insurance?

If your employer offers health insurance as part of an employee benefits package, you will be covered, although you will probably have to pay a portion of the costs. If you are self-employed, you can purchase health insurance through a federal or state Health Insurance Marketplace. People over the age of 65 qualify for federal Medicare insurance, although many of them supplement its coverage.5 Low-income individuals and families qualify for subsidized coverage through the federal Medicaid or Medicare programs.6

How Much Does Health Insurance Cost?

The cost of health insurance varies widely based on the scope of coverage, the type of plan you have, the deductible, and your age when you sign up. Copays and coinsurance also add to your expenses. You can get a good sense of the costs of plans by looking at the four levels of coverage offered by the federal Health Insurance Marketplace. It categorizes plans as bronze, silver, gold, or platinum, with each category priced according to the level of coverage provided and their corresponding costs to the user

What is the meaning of insured in health insurance?

Insured is a person or legal entity whose financial losses are covered by the insurance policy. Under general and health insurance policies the insured is entitled to receive the benefit amount from the insurer for the covered financial loss.

 4 recommended type of insurance

Four types of insurance that most financial experts recommend include life, health, auto, and long-term disability. 

What is the role of insurance?

The importance of insurance should never be undermined. Insurance acts as a vital shield against unforeseen circumstances. It protects you from unplanned expenses and offers a financial cushion from accidents, illnesses and more. Insurance safeguards the financial interests of your family in your absence.

who pays premium?

When you sign up for an insurance policy, your insurer will charge you a premium. This is the amount you pay for the policy. Policyholders may choose from several options for paying their insurance premiums. 

What are the 7 functions of insurance?

The functions of insurance can be listed as follows:

They provide certainty to the insured.

They ensure the protection of the family.

They are risk-sharing policies.

They prevent the damages that can come from loss.

What are the NHIF Cover Limits?

The Kenya Essential Package for Health(KEPH) is modeled alongside NHIF to ensure there are different packages for everyone.There are different types of NHIF Cover limits that are available. For instance,

Inpatient cover

Outpatient cover

Maternity cover and reproductive health

Ex-Gratia Payments

Last expense cover

Group Life cover

As a result, there are those covers that are common among Kenyans as discussed below:

Inpatient Cover

This cover under the NHIF Cover limit includes all medical tr

Provides 24 hour emergency and medical assistant anywhere in the world allowing you to enjoy easy and carefree international travel.traveller cover is also accepted by countries that require travel insurance before issuing a visa such as the Schengen visa.

 Benefits

Travel delay/flight cancellation.

Financial loss or expenses incurred if your trip is cancelled or delayed because of unavoidable circumstances

Medical and emergency expenses.

Emergency medical,surgical or dental expenses.

Including the cost of returning home by air ambulance or other means. The cost of return of mortal remains or repatriation costs as well as the cost of funeral expenses where death occurs.

Hospital allowance

Where the insured is hospitalized as a direct result of an accident or illness covered under the policy.

Personal accident.

Losses resulting from an accident, injuries, loss of limbs, loss of sight or death while travelling.

Passport

Costs occurred in obtaining travel documents after loss of your passport

Baggage

Total loss of baggage that has been checked in by an international airline and cost of purchasing items after baggage has been delayed by the airline.

Money.

Loss of money accidentally or through theft while on your person ,secured locked under your control or in a safety deposit box in a hotel or bank.

Personal liability

Legal liability for accidental injury to third parties and accidental damage to property.

Agriculture is a good business, but it can be risky business.

everything from flooding to drought to viral infestations can wreak havoc on your harvest.

whether you have invested in livestock or crops or both, and whether want cover from a specific threat or against everything, we can design a custom made agriculture insurance policy to ensure that you will always, come what may, reap what you have sown.

let us help you find the best way to avoid, minimize and transfer your risk.

PERILS COVERED

ALL FIELD CROPS covered from fire, windstorm, excessive rainfall, uncontrollable pests and diseases, drought except under irrigation farming, hail, flood and lightning.

LIVESTOCK(cattle diary and beef, poultry, sheep, goats, pigs, rabbits, pets, fish, horse) covered from mortality due to accidents, disease, epidemic, fire, smoke, lightning, dystocia (abnormal or difficult delivery), euthanasia(practice of ending life painlessly) and death(loss of milk).

FORESTRY(fire, lightning, explosion, windstorm) covered from floors/inundation, malicious damage, subsidence and landslide, riots, strikes, civil commotion, Aircraft and other aerial devices or items dropped.

GREENHOUSE

what is covered plastic cladding steel structures, growing crop, yield in transit, machinery breakdown, deterioration of stock, irrigation equipment, other assets related to greenhouse production.

perils covered are fire and fire lightning, windstorm excessive rainfall, hailstorm, flood and lightning impact damage, plane crash, water from reservoirs, or water tanks.

optional additional covers.

transit, machinery breakdown, deterioration of stock, irrigation equipment, other assets related to greenhouse production.

Physical loss or damage to specified

property arising from any cause 

Value of all Electronic Equipment, computers, Laptops, printers and accessories (Values should be at current replacement costs as new).

1. On telephone system

2. Computer and Accessories

3. Printer

4. On Financial Software

5. Photocopy Machine

6. Fax Machine

7. Photocopy Machine

8. Fax Machine.

Indemnity against loss of or damage to the specified property as a result of any cause. This includes all items of portable nature for the hotel.

1. Alarm Systems

2. Solar panels

3. Electronic Switch Board with submeter

4. Bore hole machinery if any

5. CCTV cameras and fittings

6. Air Compressor

7. Mobile phones             

8. Projectors and its accessories

9. Laptops

10. Electical Switch Board

11. Bore Hole Water Pump 

12. Tablets

13. I phones

14. Decorders and dishes

15. Music systems and accessories etc.

Indemnity against loss of revenue 

following business interruption 

from damage caused by the under

noted perils:-

1. Fire & Lighning

2. Riot & Strike

3. Civil commotion

4. Malicious Damage 

5. Bush Fire

6. Standard Explusion

7. Earthquake Fire & Shock

8. Special Perils

Value of Building located at Plot No. )

Value of Building located at Plot No. )

1. On Stock in trade consisting of raw material, work in progress

finished goods of the insured or on goods held in trust or on 

commission of which we are responsible in the event of loss

or damage whilst contained in the building.

2. On plant and machinery 

3. Generator 

4.Washing Machines

5. Furniture and fittings

4. Blowing Machine

9. Machinery and Accessories 

10. Fixtures and accessories

12.loose tools

Provides Indemnity against loss of money in transit or kept in the insured premises:

On Money In Transit 

On Money In Premises During Business Hours 

On Money In Premises Outside Business Hours 

On Money In Safe Outside Business Hours 

On Damage To Safe 

On Money with Authorised Senior Staff 

On Estimated Annual Carry

Loss or Damage to property 

arising from forcible entry and / or

exit from premises insured 

First Loss Sum Insured.

1. On Plant & Mchinery whilst contained on building 

2. On stcock, raw material, finished goods held in trust 

3. On furniture, fixtures, fittings, equipments & tools 

Loss or Damage to property/goods 

arising from forcible entry and / or

exit from premises insured 

Desired limit of liability in accordance with exposure to third party 

liability for injuries or damage to property

Any one period of Insurance

Any one accident 

Desired limit of liability in accordance with exposure to third party 

liability for injuries or damage to property

Any one period of Insurance

Any one accident 

List of employees  and their Salary/Wages

per annual salary for each category 

OCCUPATION/CATEGORY 

     General clerks

     Telephone Operators

     Typist/Secretary

     Room attendants

     Cooks

     Watchman

     Waiters

     Sales People

    Accountant

     Managers

     E.T.C

WIBA is compulsory for all 

Employees as per WIBA 2007 Act

            BENEFITS 

  Death

  Permanent Disability

 Temporary Disability

  Medical Expenses

   Funeral Expenses

Firstly, just a reminder, WIBA (Work Injury Benefits Act) is a legal benefit for all employees of Kenyan businesses who have any injury at work, or work-related illness(limited to a maximum of 8 years´ salary). For the full rules and benefits the Act needs to be read.

Employers Liability (or Common Law Liability), is where an employer is sued for said injury or illness, claiming it is as a result of the ‘negligence’ of the employer (no time limit).

A lot has been written Worldwide about the latter of the two, Employers Liability, but WIBA is particularly unique to Kenya, and it appears no-one really has an answer. If someone contracts coronavirus, can they absolutely prove that it was work related? I imagine, some hospital workers would have a better chance of proving this, than say a building contractor? As of now, the Kenyan insurance market is ‘silent’ about the situation and I do believe this will continue for some time. I also feel that, in the event of a claim being made under WIBA, it will initially be rejected on the grounds of ‘proof of contagion’.

You do, however, need to consider the issue of Employers Liability. As mentioned earlier, for a claim to be successful here, there needs to be evidence of negligence. This does not, however, prevent a person, or a group of people, taking legal action ‘alleging’ negligence, at which stage you as an employer will need to defend yourself by appointing a lawyer and seeing the case through to the end. If you win, then great, but you will have incurred costs, if you lose, it is these costs plus any compensation you will have to pay.

What you need to consider now is “could employers be held liable in the event of infection with the virus?” A leading law firm in the United Kingdom has said:-

The message is clear, set up internal Covid-19 rules, advice lines, review health and safety, provide safe/safer working environments etc., and ensure your staff are fully informed and kept up-dated, alternatively you can ‘stick your head in the sand’ and you are there to be shot at!

If you have any questions related to any of the above please email us on [email protected] or call us on line 0798883447

What is Employee Benefits Liability Coverage?

It provides coverage to an employer for errors or omissions in the employer’s administration of its employee benefit program. For example, if a new employee requests to receive medical insurance through the employer and the employer failed to add the new employee to the plan. Then the health insurance company later denies coverage for the employee’s medical claim. The Employee Benefits Liability coverage would pay for the benefits that would have been payable under the health insurance plan but for the employer’s error.

This coverage applies to a wide range of employee benefits including health, life and disability insurance, retirement plans, and other benefits offered through plans administered by the employer.

To learn more about Employee Benefits Liability coverage and to discuss your business’ coverage needs, 

contact email. [email protected] 

Call line. 0798883447

Political Violence & Terrorism (PV&T) coverage has been excluded from Kenyan insurance policies for many years. If someone requires this coverage, they must purchase it separately. Interestingly, unlike the UK and other countries, this exclusion also includes Political Violence, whereas it is typically only Terrorism coverage that is excluded.

What is the difference between Political Violence and Terrorism? It’s not absolutely clear, but I’ll try to provide a simple explanation.

A Terrorism attack is relatively straightforward to categorize, such as the incidents at Westgate, Garissa, Dusit, etc. A classified terrorist group or organization takes responsibility, or it is clear that the act was perpetrated by such an organization. In this instance, the policyholder would need Terrorism coverage to make a claim.

Political Violence, on the other hand, is more subjective. Consider a situation where a group of people decides to have a few drinks and then rampages through a high street, smashing windows, daubing graffiti, breaking doors, etc. This would be covered under the standard insured peril of riot, civil commotion, or malicious damage. However, if the same group carries political placards, flags, or other paraphernalia, does it become politically motivated and therefore fall under the Political Violence part of PV&T? I think the answer is ‘yes,’ but I cannot be absolutely sure.

In some situations, it may depend on how the incident is reported in the media. For example, the current unpleasant situation in Kenya is very much politically motivated. However, one could argue that some people involved in causing damage, including looting, might just be opportunists hanging out at the back of a political rally or uprising. Are they involved in or interested in the political side, or are they simply out to loot premises and businesses?

As such, I cannot provide a definitive answer. My advice, if you are concerned, is not to take any chances and to purchase the coverage if you haven’t already. Call us if you would like any further information.

If you have any questions on the above, please do get in touch: 

[email protected]

Call line:0798883447

Professional indemnity insurance is a form of liability insurance which helps protect professionals from legal liability that may arise due to acts of negligence, error or omission in the rendering of or failure to render professional services for others in the insured’s capacity as a professional 

Professional indemnity (PI) insurance (also known as Errors & Omissions insurance) protects you and your business against claims made by clients for errors in advice, services, or designs that you provide.

It’s a vital part of business insurance cover for companies of all sizes in a wide range of industries, given the potentially high costs of defending legal action.

But what are the key benefits of PI insurance, what type of companies need professional indemnity, and what type of scenarios are covered by PI?

Five benefits of professional indemnity insurance

Whether you are a freelancer providing design services or a large firm of accountants with multinational clients, professional indemnity insurance can benefit and protect your business.

Here are five of the key benefits of PI insurance.

1.Financial security

Protecting your business’s finances is the most important benefit of professional indemnity insurance.

The cost of defending legal action, and paying any compensation due, following an error in your work can be ruinous, and could force the closure of your business.

PI insurance will cover your legal fees, court costs, and compensation awards, including any fines your customer has incurred because of your mistake.

It provides a financial safety net to deal with the repercussions of claims for errors and omissions.

 2.Increase your chance of winning tenders

In some industries potential clients may make it a requirement of applying for tender that you have professional indemnity insurance up to a certain limit.

So without PI insurance you may not stand much chance of winning lucrative contracts.

Having PI insurance cover puts you in a strong position to apply for tenders and get ahead of your competitors.

 3.Business continuity

Dealing with legal issues arising from a claim against you can be hugely disruptive and time-consuming.

One of the benefits of professional indemnity insurance is how it can reduce disruption through provision of essential professional support, including claims management, and, crucially, allowing you to continue running your business.

 4.Credibility and reputation

Having professional indemnity insurance gives your business a stronger brand image and adds credibility.

It assures your clients and investors that should there be an error in your work, PI insurance is in place to deal with the legal issues arising therefrom and limiting financial exposure for all.

More clients are likely to want to work with you if they know your services are backed up by PI insurance.

And if you are found to have made an error that costs a client money, PI insurance will act quickly to deal with the claim and minimise impact on your reputation.

 5.Peace of mind

Professionals can work better when freed from the potential consequences of making a costly error.

And if a claim does occur, professional indemnity insurance provides the peace of mind for all parties concerned.

PI insurance provides practical support and financial help to reduce the stress on all concerned, and help you get through a difficult period with the minimum of anxiety.

 How do I know if I need professional indemnity insurance?

If your business provides professional advice, services, or designs to clients, then you should have professional indemnity insurance. Some industry bodies will make it a requirement of membership that you have such insurance and will often stipulate a minimum level of cover.

So, what is a professional? In short, it’s anyone who is selling their expertise and specialist knowledge based on their qualifications or experience as opposed to selling a product. Sometimes there will be a mixture of both.

Clients rely on them to provide sound advice and services because of their expertise in their field, from accountants to IT specialists, and personal trainers to solicitors.

Other professionals who need professional indemnity insurance include, but is not limited to:

Architects

Financial service advisers, mortgage brokers, pension advisers and investment managers

Translators

Chartered surveyors

Recruitment consultants

Insurance agents and brokers

Marketing and advertising professionals, including web designers

Business consultants

Stockbrokers

Public relations professionals

Publishers

Valuers

Estate agents

Healthcare providers

 There may be other reasons why you need to have PI insurance, and we’ve covered some here.

Industry requirement: Some industry regulators or professional bodies require practitioners to have professional indemnity cover, such as solicitors, chartered surveyors, insurance brokers, financial advisers, architects, accountants, and healthcare professionals.

It’s particularly important to check the rules, regulations, and industry association membership requirements that apply to your business before beginning to trade as PI may feature among them.

Contractual obligation: Some clients – particularly those entering into high-value contracts with you – may make PI a condition of the business deal.

You’re a partner or sole trader with unlimited liability: In this case, professional indemnity is essential to protect your personal investments – as well as your business.

If a client was to bring legal action against your business for a service it deemed inadequate, and you didn’t have PI in place, then you would find yourself personally responsible for legal fees and any compensation if your business couldn’t pay them. This could mean having to sell your own assets, such as property or vehicles, to clear the consequent debt.

You’re retiring from an advice-giving business: When you’ve ceased trading, legal action could potentially still be brought against your business for advice given to clients in the past. ‘Run-off cover’ is available to limited companies or partnerships, including LLPs or sole traders, and provides protection in the event of future claims.

It covers the former business owner or partners as well as directors and staff. But even if you’ve passed the reins of the company over to someone else, who will be maintaining its PI cover, you may still need to take out your own run-off policy. The new business owner could require it as a condition of the sale, or perhaps you would prefer to manage your own liabilities.

 Professional indemnity claim example

Professional indemnity insurance provides cover for a range of scenarios that could cause financial loss or damage to your client, such as loss of documents, breach of confidentiality, making defamatory statements, breaching copyright, or incorrect advice.

But if everything so far has all seemed a little theoretical, let’s look at some examples of professional indemnity claims to see how the cover works in action.

An architect recommends a building material that proves inappropriate for the project, resulting in the building work needing to be rectified at the cost of the architect’s PI insurance.

An advertising agency prints the wrong telephone number and email address on a client’s marketing material, resulting in a reprint.

An accountant fails to file a tax return by HMRC’s deadline, resulting in their client receiving a penalty fine.

A haulage company sends building materials to the wrong location, causing delays in construction that attract contractual penalties. This is a good example of a business which provides both product and professional services.

To find out more about professional indemnity insurance, and whether it would be beneficial to your business, contact our team on 0798883447

Related products: 

Business Insurance 

Professional Indemnity Insurance

Professional Indemnity Insurance for IT

Consultants Professional Indemnity

Insurance for Architectural Services 

Professional Indemnity Insurance for Estate

Agents Professional Indemnity

Insurance for Contractors

ARP member’s Professional Indemnity 

and Liability Insurance cover 

AICC member’s Professional Indemnity Insurance cover

IEMA member’s Professional Indemnity Insurance cover

Contractors' all risks (CAR) insurance is an insurance policy that provides coverage for property damage and third-party injury or damage claims, the two primary types of risks on construction projects. Damage to property can include improper construction of structures, damage that happens during a renovation and damage to temporary work erected on-site.   

Third parties, including subcontractors, may also become injured while working at the construction site.  CAR insurance coverage is common for such construction projects as buildings, water tanks, sewage treatment plans, flyovers and airports.  

What's Covered

Cover can be extended to the following

Material damage such as physical loss, damage or destruction of the property due to any cause other than those specifically excluded in the policy.  

Contractor’s Plant and Machinery, which covers movable plant and machinery owned or leased by the principals or contractors for construction work, repairs & maintenance jobs.  

Third-party liability which covers the legal liability falling on the insured contractor as a result of bodily injury or property damage suffered by a third party. 

A bid bond is a type of surety bond that guarantees compensation to the project owner if a bidder doesn't complete a project. Bid bonds are often required for construction jobs and other projects that use a bid-based selection process. They are a legal requirement for many public and private tenders in Kenya 

The existence of a bid bond gives the owner assurance that the bidder has the financial means to accept the job for the price quoted in the bid .

These Bonds are also known as tender bonds and can be classified into three categories:

Bid Bonds with no financial obligation (for Contractors)

These bonds are normally issued for tenders, where the only obligation is a “Promisory Note” to the effect that in case the tenderer wins the tender, we will issue a Performance Bond.

The risk is minimal with these types of Bonds as there is no financial obligation involved, and the tenderer if successful may even take a performance bond from any other company.

Bid Bonds which have an element of a Guarantee

In such bonds, a bond amount is stated and this amount is normally a percentage of the tender amount. This amount is normally assumed to be the cost, which would be incurred by the principal for calling for new tenders.

Bid Bonds used to tender for supply of goods

Organisations which want to buy goods often call for tender for supply of such goods from interested suppliers.

Often, one condition on such tenders is that a bid or tender bond should be provided with along with the tender documents.

The common conditions in such tenders are that the tender should be valid for a certain time period (i.e. 30 days, 60 days, etc), the tender will not be withdrawn before the expiry of the time period or if awarded the tender, a supply or performance bond will be supplied. There may also be different conditions on different types of tender documents.

Bid bonds normally have a period during which the bid is valid and in the event the insured is not awarded the tender, the bid bond lapses

Types of Bonds and How They Work

Bonds are financial instruments that investors buy to earn interest. Essentially, buying a bond means lending money to the issuer, which could be a company or government entity. The bond has a predetermined maturity date and a specified interest rate. The issuer commits to repaying the principal, which is the original loan amount, on this maturity date. In addition, during the time up to maturity, the issuer usually pays the investor interest at prescheduled intervals, typically semiannually.

Key Takeaways

Bonds are debt securities issued by corporations, governments, or other organizations and sold to investors.

Not all bonds can be easily traded, and not all securities are available to private investors.

Bonds typically have a low price correlation with stock markets. This lower correlation makes them an effective tool for diversifying investment portfolios.

Besides buying individual bond securities, investors can access diversified bond portfolios via fund investments, such as bond exchange-traded funds (ETFs).

Most bonds have regular and stable interest payments, making them well-suited for those on a fixed income.

Bonds ordinarily serve a dual purpose in your portfolio. First, they provide a steady and more predictable income stream of regular interest payments. This makes them attractive to those looking for consistent returns. Second, they help diversify your portfolio. Since bonds typically correlate negatively with equities, they may offset potential losses from other riskier investments.1

Types of Bonds

In finance, bonds represent a beacon of stability and security. Bonds come in many forms, each with unique characteristics and advantages. With so many choices available, it's essential to understand the sometimes subtle but important differences among the most common types.

1.Corporate Bonds

Corporate bonds are fixed-income securities issued by corporations to finance operations or expansions. Private or institutional investors who buy these bonds choose to lend funds to the company in exchange for interest payments (the bond coupon) and the return of the principal at the end of maturity.2

The risk and return of corporate bonds vary widely, usually reflecting the issuing company's creditworthiness. This makes due diligence essential before investing in one.

Treasury Bonds

Treasury bonds are long-term investments issued by the U.S. government. They have a maturity of 10, 20, or 30 years. These bonds are backed by the U.S. and, therefore, are regarded as very safe. Due to their low risk, they offer lower yields than other types of bonds. However, when market interest rises, the prices of these longer-running and lower-yielding bonds can come quickly under pressure. Investors use Treasury bonds as a secure long-term investment.3

2.International Government Bonds

International government bonds are debt securities issued by foreign governments. They allow investors to diversify their portfolios geographically and potentially benefit from currency fluctuations or higher yields. Depending on the country or region, they can have additional risks, including political instability, exchange rate volatility, and many others, making them a comparatively riskier investment choice.

3.Municipal Bonds

Municipal bonds ( called “munis”) are debt securities issued by states, cities, or counties to fund public projects or operations.4 Like other type of bonds, they can also provide steady interest cash flow for the investors. Additionally, these bonds typically offer tax advantages since the interest earned is frequently exempt from federal and sometimes state and local taxes, too.

Agency Bonds

Agency bonds are generally issued by government-sponsored enterprises or federal agencies. Although not directly backed by the U.S. government, they have a high degree of safety because of their government affiliation. These bonds finance public-purpose projects and usually have higher yields than Treasury bonds. However, they may carry a call risk, meaning the issuer can repay the bond before its maturity date.

Green Bonds

Green bonds are debt securities issued to fund environmentally friendly projects like renewable energy or pollution reduction. This allows investors to support sustainability while earning interest. They are like regular bonds, except the funds are earmarked for green initiatives. While they offer a way to invest responsibly, it's essential to ensure that they are actually funding initiatives with a positive ecological influence and avoid greenwashing.5

Bond ETFs

Bond ETFs specifically invest in bond securities. They can offer broad diversification within the bond community, and an ETF may hold a range of different bonds.6 This provides liquidity, price transparency, and lower investment thresholds than individual bonds. However, like individual bonds, they're subject to interest rate and credit risk, among other risks.6

Key Considerations for Bond Investors

When investing in bonds, it's crucial to consider credit ratings, which indicate the issuer's ability to repay debt; interest rates, since they affect bond prices and yield; and maturity dates, which determine when you'll receive the principal back.7 Ensuring you understand these vital features can significantly help you make informed decisions and align your bond investments with your overall financial goals.

Also, keep in mind that bond prices and yields share an inverse relationship. When bond prices rise, yields fall, and vice versa. This is because the fixed interest payment of a bond becomes more attractive compared with the market when prices drop, increasing the yield. Conversely, if bond prices increase, the fixed interest payment is less attractive, reducing the yield.7

How to Buy Bonds

To buy bond securities, you have two main choices: individual bonds or bond funds. 

Individual Bonds

Individual bonds can be bought through brokers, banks, or directly from the issuer. However, certain individual bond securities are not available to private investors. Here are some of the reasons for this:

High minimum purchase: Some bonds require a large initial investment that is ordinarily out of reach for individual investors.

Limited accessibility: Certain bonds, especially exotic or international ones, are not readily available on the retail market.

Regulatory restrictions: Some bonds, like municipal or certain corporate bonds, may be restricted to institutional investors.

Bond Funds

Bond funds, meanwhile, are investment vehicles like mutual funds or bond ETFs that pool funds from a large number of investors to buy a diversified portfolio of bonds.8 This provides the means for greater diversification and professional management but has ongoing fees.

The choice between individual securities and bond funds depends on your investment goals, risk tolerance, desired level of involvement, and the investment exposure you are seeking.

You can either hold bond securities or actively trade them. Holding bonds versus trading bonds presents a difference in strategy. Holding bonds involves buying and keeping them until maturity, guaranteeing the return of principal unless the issuer defaults. Trading bonds, meanwhile, involves buying and selling bonds before they mature, aiming to profit from price fluctuations. However, this carries a higher risk.

What Is a Bond Rating?

A bond rating is a grade given by a rating agency that assesses the creditworthiness of the bond's issuer, signifying the likelihood of default.

Can I Sell My Bonds Before the Maturity Date?

Yes, generally, bonds can be sold before maturity in the secondary market (if there is enough liquidity), but the price you get may be more or less than your original investment.

How Does Bond Maturity Affect Price?

Longer-maturity bonds are generally more sensitive to interest rate changes, so their prices can fluctuate more than shorter-maturity bonds.2

How Does Inflation Impact Bonds?

Inflation can significantly diminish the buying power of a bond's fixed interest payments, making them less valuable. Hence, inflationary risk should always be considered when buying them.

What Does It Mean When a Bond Is Callable?

A callable bond entitles the issuer to repay the bond before its maturity date. There is usually a predetermined call price and date listed in the bond prospectus.

The Bottom Line

Different bond types—government, corporate, or municipal—have unique characteristics influencing their risk and return profile. Understanding how they differ and the relationship between the prices of bond securities and market interest rates is crucial before investing. This can help confirm that your bond choices align with your financial goals and risk tolerance.

The Right Types of Insurance for Businesses

There are many types of insurance options out there that business owners can get. Insurance helps protect your company from different risks that can come up during normal operations. Choosing what business insurance (sometimes calledcommercial insurance) you need can seem overwhelming, but we’re here to help.

Many business owners start with a Business Owner’s Policy (BOP) for their small business insurance needs. It combines three essential coverages:

General liability insurance

Commercial property insurance

Business income insurance

We made our BOP customizable, so you can add other business insurance coverages to get more protection. For example, if your business provides a professional service to customers, you may want to get a professional liability insurance policy. It can help protect your business from claims that it made a mistake in the professional services given.

We know every business is different. That’s why we’re here to help you get the right types of business insurance.

8 Types of Insurance Policies for Small Businesses to Consider

You may have to get different types of insurance depending on the industry you’re in. That’s because every business faces unique challenges and risks.

While there are many types of insurance that you can get, read about eight policies that many small businesses can get to help protect them from a variety of risks.

1. General Liability Insurance (GLI)

General liability insurance helps protect your business from claims that it caused:

Bodily injury to someone else

Property damage to another person’s belongings

Personal injury, like libel or slander

2. Commercial Property Insurance

Commercial property insurancehelps protect your owned or rented building and equipment that you use to run your business.

Be aware that this insurance doesn’t cover damage from earthquakes or floods. You’ll likely have to get a separate policy, likecommercial flood insurance, to help protect your business from these kinds of claims.

3. Business Income Insurance

If you can’t run your business because of covered property damage, business income insurance can help replace your lost income. So, you can use this coverage to help pay for ongoing expenses, like rent, utility bills or payroll. This type of insurance is also known as business interruption insurance.

4. Professional Liability Insurance

Professional liability insurancehelps cover lawsuits claiming that you made a mistake in the services you provided. This type of insurance is also known as errors and omissions (E&O) insurance.

5. Workers’ Compensation Insurance

Workers’ compensation insurancegives your employees benefits if they get hurt or sick from their job. These benefits can help:

Pay for their medical bills

Replace most of their lost wages if they miss work to recover

Cover funeral costs if they lose their life due to a work-related injury or illness

Pay for ongoing care, like physical therapy

Most states require businesses with employees to carry workers’ compensation insurance. You can face fines, penalties and criminal charges if you don’t comply with your state’s law.

6. Data Breach Insurance

Data breach insurance helps your business respond to a data breach if personally identifiable information gets lost or stolen. Some insurers may call this coverage cyber insurance.

Data breach insurance can help pay your costs to:

Notify impacted individuals

Offer identity theft monitoring services

Create a public relations campaign

7. Commercial Umbrella Insurance

Commercial umbrella insuranceextends the coverage limits for some of your liability policies. So, if a claim exceeds the limits on your policy, your umbrella insurance can help cover the difference.

8. Commercial Auto Insurance

Commercial auto insurance helps protect you and your employees on the road if you drive company-owned vehicles for business. It can help cover property damage and bodily injury claims from an accident your business causes. This is important because a personal car insurance policy won’t help cover third-party claims in an accident you cause with a business-owned vehicle.

What Different Types of Insurance Are Small Business Insurance Requirements?

Depending on your type of business and where you are, the law may require you to carry certain types of insurance. For example, most states require employers to have workers’ compensation insurance. Some states have laws for business insurance by industry. For example, accountants may have to get professional liability insurance.

It’s important to make sure you’re familiar with your state business insurance laws. You can work with an insurance agent to make sure you’re complying with regulations. They can help you customize an insurance policy that fits your needs and budget.

Get Recommendations on the Types of Business Insurance You May Need

Regardless of the size of your business and any industry trends, business insurance coverage is important. It can give startups a good foundation when they open their doors for the first time. And it’s important for experienced business owners too, because depending on your business and your types of insurance, policy needs may change over time.

We can work with you to get the types of business insurance your company or business needs. Get abusiness insurance quote today and learn how we can help you

Even though your organization’s goal is to help people, you are still running a business. That means your non-profit needs to protect itself against the risks that small business owners face. We’ll help you design a non-profit insurance policy that covers your organization’s unique needs

This policy covers a wide range of engineering related risks related to industrial machinery. The company offers covers on various classes of engineering insurances as follows:  

What's Covered

Contractors All Risks  

Erection All Risks  

Machinery Breakdown  

Electronic Equipment