In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Insurance basically is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

Interestingly, in the United States of America, there are quite a number of health insurance policy covers that are specifically designed for small business owners and some of these insurance policies can be tailored to specific industries while some can be general.

In this article, we are going to be looking at the various types of health insurance policies that a small business needs in order to operate full-swing.

6 Types of Health Insurance for Small Business Owners

  1. Health Insurance

Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over numerous persons. By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement.

The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. According to the Health Insurance Association of America, health insurance is defined as “coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment”

  1. Accident Insurance

In the work place especially in factories or mining sites, accidents are bound to happen hence the need for a specific accident insurance policy to cover employees that work in such environment. Accident insurance is a type of insurance where the policy holder is paid directly in the event of an accident resulting in injury of the insured.

The insured can spend the benefit payment however they choose. Accident insurance is complementary to, not a replacement for, health insurance. Please note that accident insurance complements but does not replace health insurance.

In the event of an accident resulting in an injury, a health insurance policyholder may still be responsible for out – of – pocket expenses. These may include copayments, deductibles, and coinsurance charges that must be paid by the insured before the health insurer pays any benefits.

In the first half of 2018, almost half of Americans with health insurance had high – deductible plans defined as plans with a deductible of at least $1,350 for an individual policyholder. Without accident insurance, the insured would be responsible for paying that full amount (plus a copayment and any out – of – network costs) themselves before a health insurer began paying for care.

  1. Disability Insurance

Disability insurance for businesses provides income in a situation where a business owner or employee is unable to work due to an illness or injury that occurred away from work. If an illness or injury keeps someone from working for an extended period, disability insurance provides financial assistance to replace a portion of lost income.

This type of coverage is typically available through employer – provided or voluntary employee benefits. Business insurance can also provide disability benefits with a workers’ compensation policy if an employee becomes disabled after a work – related injury or illness.

In the United States, there are so many good reasons to have individual disability insurance to replace your income should you become injured. However, if you own a business, it is not just about you. Note that as a business owner, you are more or less the primary driving force of your business, as well as the bankroll.

  1. Critical Illness Insurance

Critical illness insurance, otherwise known as critical illness cover or a dread disease policy, is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy.

The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation. The schedule of insured illnesses varies between insurance companies. In 1983, four conditions were covered by the policy, i.e. heart attack, cancer, stroke and coronary artery by – pass surgery.

The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 14 days is the most typical survival period used. In the Australian market, survival periods are set between 8 – 14 days.

Please note that the contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specializes in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

  1. Terminal Illness Insurance

Terminal Illness Insurance (known as Accelerated Death benefit in North America) pays out a capital sum if the policyholder is diagnosed with a terminal illness from which the policyholder is expected to die within 12 months of diagnosis, by a physician who specializes in that illness or condition.

Terminal Illness Insurance is a form of insurance that is often added to a life insurance policy or a Mortgage Life Insurance policy by the insurance company issuing the policy. Terminal Illness Insurance is not available as a separate insurance policy.

If a life insurance policyholder also has terminal illness insurance, then he/she has the benefit of knowing that if he/she is diagnosed with a serious illness and is expected to die within 12 months of diagnosis, then the combined policy will pay out straight away rather than waiting for the policyholder to die (as would happen if the policyholder did not have terminal illness insurance).

Please note that terminal illness insurance is not same as critical illness insurance. The two forms of insurance are very different.

  1. Pollution Insurance

Pollution insurance is a type of insurance that covers costs related to pollution. This can include the costs of brownfield restoration and cleanup, liability for injuries and deaths caused by pollution. Most businesses will purchase broad commercial general insurance or property insurance policies but these usually contain an “absolute pollution exclusion” and thus rarely cover pollution, although there may be limited pollution coverage.

It is important to state that pollution insurance usually takes the form of first – party coverage for contamination of insured property either by external or on – site sources.

Coverage is also afforded for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded.

Ajaero Tony Martins