Small and medium-sized enterprises (SMEs) are the backbone of the Malaysian economy, making up 98.5% of all businesses in the country. Unfortunately, many SMEs in Malaysia do not have adequate coverage of insurance policies, resulting in significant losses when unforeseen events occur.
Law also requires insurance policies for certain types of businesses, such as those in the construction industry. It’s crucial for SMEs to understand the different kinds of insurance coverage and how to choose the right one.
Property insurance is a type of insurance that protects businesses from property damage and loss caused by events such as fire, theft, and natural disasters. This insurance is essential for not only big companies but SMEs as well. In Malaysia, buildings are particularly vulnerable to natural disasters such as landslides and floods, which may cause extensive damage to properties.
An example of a property insurance policy for an SME in Malaysia is the Allianz SME Shield. This policy covers fire, lightning, explosion, flood, and other risks that can cause damage or loss to your business property. By having property insurance policies, businesses can recover from such events with the cost of repairs or replacement covered.
Liability insurance policies protect third parties’ legal liability for injuries, property damage, or other losses. For example, if a customer falls in your store or if your product causes harm to a customer, liability insurance can help cover the cost of legal fees, settlements, and judgments. This is the right insurance for you if your business mainly deals with customers, suppliers, or other third parties.
One of the insurance companies in Malaysia that offers this policy is AIG. AIG BizGuard Plus covers third-party liability claims arising from bodily injury, property damage, or advertising liability.
Business Interruption Insurance
As the name suggests, this insurance will cover the loss of income and extra expenses incurred when your business is forced to shut down or suspend operations due to an unexpected event. For example, if you own a restaurant that is forced to close temporarily due to a natural disaster or a fire, business interruption insurance can help cover the costs of rent, payroll, and other expenses.
Tokio Marine BizResilience is an example of a business interruption insurance policy for SMEs that you can find in Malaysia. This policy covers lost profits, ongoing expenses, and extra expenses incurred due to the interruption of business operations.
Recently, more people are becoming more aware of the importance of securing their data online. This applies to companies and organisations as well. Cyber insurance policies protect your business from losses or damages from cyber attacks, such as data breaches, ransomware, or other cyber threats.
SMEs that store sensitive customer data, credit card information, and confidential business data might consider Chubb Cyber Enterprise Risk Management. This policy covers loss of income, damage to data or systems, and liability arising from cyber-attacks.
Workers’ Compensation Insurance
In 2021, there were 21,534 cases of occupational injuries in Malaysia. Accidents can still happen even if your workers know how to be careful. Business owners need insurance to cover employees who suffer work-related injuries or illnesses. Malaysian employers are required by law to provide their employees with insurance under the Workers’ Compensation Act 1952. This insurance can cover medical expenses, lost wages, and other related costs.
SMEs can choose SME Care Insurance from Etiqa. It offers comprehensive solutions for employees’ well-being that cover death, disability, illness, hospitalisation, and outpatient.
SMEs in Malaysia should consider investing in insurance policies to protect against potential losses from unforeseen circumstances. When selecting insurance policies, it’s essential to choose the right coverage and work with reputable insurance companies that understand the unique risks SMEs face in Malaysia.
Many big names, such as AIG, Allianz, AXA, and Chubb, usually offer SMEs a range of insurance products. With the right policies, business owners can focus on growing their businesses with peace of mind.