EduMetrics
CareersCoursesExamsCoachingApprenticeshipsEntrepreneurGuidanceBlog

Guide to Business Insurance in India

Business Planning

Business Insurance Guide for Indian Entrepreneurs


Business insurance protects your enterprise from unexpected losses like fire, theft, natural disasters, lawsuits, and employee injuries. Most bank loans also require insurance on the assets financed.


Types of Business Insurance


  • Fire & Burglary Insurance
  • Covers damage from fire, lightning, explosion, storms, and burglary
  • Required by banks if you take a secured loan
  • Premium: 0.05-0.15% of sum insured per year
  • Available from all general insurance companies

  • Shop Keeper / SME Package Insurance
  • All-in-one policy covering fire, burglary, money, liability, and breakdown
  • Best for small shops, clinics, restaurants, salons
  • Premium: ₹3,000-15,000/year for sum insured of ₹10-50 lakh

  • Commercial General Liability (CGL)
  • Covers third-party bodily injury and property damage claims
  • Important for businesses with customer footfall
  • Premium: ₹5,000-25,000/year

  • Professional Indemnity Insurance
  • For consultants, doctors, lawyers, CA/CS, IT professionals
  • Covers claims arising from professional errors or negligence
  • Premium: ₹3,000-15,000/year

  • Workmen Compensation Insurance
  • Mandatory if you have employees
  • Covers employee injuries, disability, and death during work
  • Premium based on annual wages and industry risk class

  • Keyman Insurance
  • Life insurance on key person (founder/promoter) whose loss would impact business
  • Premium is a business expense (tax deductible)
  • Banks may require this for large loans

  • Cyber Insurance
  • For businesses handling digital data and online transactions
  • Covers data breaches, cyber attacks, and business interruption

    • How to Choose

  • Start with fire/burglary insurance and shop package policy
  • Add liability insurance as your business grows
  • Compare quotes from IRDAI-registered insurers
  • Consider deductibles, as a higher deductible means a lower premium
  • Review and update sum insured annually

    • Key Takeaways

    • Fire/burglary insurance is typically required for bank-financed assets
    • Shop package policies (SME Package) offer best value for small businesses
    • Workmen compensation is mandatory if you have employees
    • Premiums are tax-deductible business expenses
    • Compare quotes from multiple IRDAI-registered insurers before buying

    Official Links

    IRDAIInsurance Information Bureau

    Related Business Ideas

    Beauty SalonPharmacy StoreGym Fitness StudioCoworking Space

    Related Government Schemes

    Udyam Registration

    Disclaimer

    This guide is provided for informational and educational purposes only. EduMetrics is not a legal, tax, or financial advisor. Regulations, procedures, and fees are subject to change. Please verify all information on the respective official portals and consult a qualified professional before taking any action.