Credit Insurance – A Primer

There are a lot of corporate insurance policies, right from one for the employees, to manage their health and safety of the work place;ensuring physical stock to almost anything that is essential to the running of the business. However, perhaps the most important one for the financial health of the company is credit insurance. Credit insurance is a vital tool that protects your cash flow when the business cycle is taking a turn for the worse.

Now, let us take a look at some of the major features of the credit insurance policy and why you need to be covered under credit insurance. Here are the four key reasons for you to go ahead with credit insurance for your company.

1. Guaranteed Payments

The World Bank has stated that, “Trade credit insurance is an insurance policy and risk management product that covers the payment risk resulting from the delivery of goods and services”. Credit insurance helps you with collection of dues which can otherwise dampen your cash flow. As we know “cash is king” and, tight cash flows in a tight economic cycle could affect the balance sheet and in the worst case, cause a business to shut shop. A credit insurance policy will act as a safety net, thereby providing you with a platform to trade with confidence.
This policy covers up to 90% of a contract’s value and protects your company not only by reducing exposure but also by shielding you from defaulting customers and bad debts. In short, this is a vital risk management tool.

2. Grow your Business

Selling on credit can be a necessary evil for the growth of a business. While there is an element of trust when it comes to dealings with trading partners, insurers providing credit insurance have reliable tools to determine the credit worthiness of your customer. Credit insurers issue ‘early warning signals’ to your company. This is done when a potential partner is uninsurable or when previously granted insurance cover has been withdrawn. By playing a proactive role in assisting your company trade more securely, a credit insurance cover can help you make better decisions.
Thus, the sales of your company can grow and that growth will be safe growth with no to limited defaults.

3. Deterrent to Defaults

Credit insurance acts as a deterrent for those who are used to defaulting payments. Defaulterscan be delisted or blacklisted from doing any further business with banks and other financial institutions i.e. the cost of compliance falls on the defaulters. This incentivizes them to keep their “credit ratings” in proper shape with credit insurers as they now understand the implications of not only losing one client but potentially many of their clients who will be alerted on their payment defaults.

4. Banker’s Comfort

When you have credit insurance, even your bankers feel more confident that your receivables are safe. This will urge them to bank with you by extending new loans and lines of credit for business expansion. Because of higher quality of receivables backed by an insurance policy, the bank will also be more willing to extend working capital finance at lower costs.
Now that you know how credit insurance can not only safeguard your business, but help it grow, it is time to find the right team of professionals to work with. New Age Insurance Brokers has the hands on experience in credit insurance across myriad industries. Please e-mail us at info@newageib.com and we will be more than happy to help you!

Manage a tech company? Learn why you must have cyber liability insurance

The world has been seeing massive growth in electronic communication or digital communication. From the moment we wake up till we sleep, we engage in hundreds of digital transactions knowingly or unknowingly.

When you run a business that is vested in digital services or products, it will involve your clients or customers sharing very sensitive information, which also includes various business and financial credentials. Besides client information, a technology company will also have other sensitive data such as business contracts, e-mails, pricing, employee details etc. that can be vulnerable and thus open to exploitation.

The data on cybersecurity paints a clear picture of the type of cyber risks a business has to endure. AV-TEST registers over 350,000 new malware every single day, i.eove 127 million new malware every year!And the numbers keep on rising because data exploitation is a lucrative crime as various laws and regulations rush to catch up with this ever evolving sector. The news of Yahoo being hacked in 2016 compromising over 3 billion accounts is an example of how damaging data breaches can be not only to short term business but long term reputation and business.

In January 2019 alone, 1,769,185,063 user accounts where breached across various hacks. So it goeswithoutsaying that like every business, a business working with digital products or services will also experience its fair share of risks. Companies that can manage cyber risk well will gain client and investor confidence and thus experience business growth.And this brings us to Cyber liability insurance.

What is Cyber liability insurance?

Cyber liability insurance provides the policyholder coverage against financial losses that they may suffer from data breaches or other cyber-related events.

For example, when a business experiences a data breachlike a hack where sensitive financial credentialsis stolen, then the policy will offer financial support for different legal and non-legal expenses that is related to the breach.

Most Cyber liability insurance will provide financial support for the expenses incurred by the company in restoring the stolen/damaged data, securing the data on theservers and computers, etc. in addition to the legal expense support. The standard coverage found on most Cyber liability insurance coversare as follows:

  • Lost incomes due to a data breach
  • Extortion losses
  • The amount incurred in notifying the customers
  • The cost incurred in fighting class action lawsuits

The level of coverage and additional features depends on the type of Cyber liability insurance that one chooses.

Another factor to consider when it comes to Cyber liability Insurance is whether to choose first-party insurance or thirdparty insurance.

First party coverage: In this type of coverage, the insurance company will only provide coverage to the losses incurred to your company.

Third party coverage: The insurance company will cover for the legal expenses against complaints raised by the customers or from people who were affected by what happened with your business.

Bottom line…

Starting a technology business is certainly demanding. Knowing the risks involved and having a plan B is a crucial part of the conducting business. Being a tech company, the risks are mostly related to the data integrity of both the business and its customers. Having cyber-liability insurance gives you that boost of confidence you need to take your business to new heights.

If you are wondering which other insurance policies you can use to protect yourself and your business from financial risks, then we can help! Contact NAIB today to know about various insurance policies from the best insurance providers in Dubai.

Starting a New Business? Here are 8 Insurance Policies You Need to Look Into!

The world of business has its rewards, but it also has its risks. One of the biggest fear that prevents many from being entrepreneurs is the fear of failure. And this isn’t only about the failure to make profitable business decisions, but it is also about the fear of making mistakes.

But these risks will forever be a part of running a business, and it should not deter you from starting your own venture. Insurance policies for businesses are all about minimizing these risks, helping you realize your dreams. In this article, we will walk you through some of the best insurance policies you should opt for as a business.

1.    Professional liability insurance (Errors and Omissions Insurance)

The professional liability insurance covers the legal costs that arise from defending yourself against the negligence claims made by your clients. This scenario happens when the clients face some form of losses due to the advice or service that you had provided them.

The professional liability insurance covers your legal costs and some damages that will be specified by the insurance company. Different industries have certain variations when it comes to professional indemnity insurance coverage and conditions to compensate for different circumstances.

2.    Product liability insurance

If your business specializes in making products for the general market, then a product liability insurance is a must-have. Professional Liability Insurance provides coverage for damages caused by your service/advice, while Product Liability Insurance provides coverage for damages caused by your products.

You might think about why you would need such an insurance cover as you are confident in your product. And this is why many businesses get stopped in their tracks after getting a lawsuit, as they weren’t prepared for it in the first place. Save yourself from such a misconception, choose a product liability insurance to future proof your company.

3.    Medical Insurance

Medical insurance for employees is mandatory in the Dubai and Abu Dhabi. If you are hiring someone in your business or company, they must be provided medical insurance.

In Dubai, the DHA (Dubai Health Authority) put forward the law of mandatory medical insurance and this applies to all economic areas of Dubai, including free trade zones.

4.    Property Insurance

Property Insurance for businesses also known as Commercial Property Insurance offers coverage for the physical assets of your company from damages. Natural disasters are not typically covered under the insurance policy. However, this is largely up to the insurance provider.

The benefit of property insurance cover is that it protects the contents within and outside of your building, granted that they are within the same property.

When your business possesses assets that are very valuable, it is always better to insure them.

5.    Workers Compensation Insurance

People are the engine of one’s business and taking care of them will boost their morale and hence their performance. This is where the Worker’s compensation insurance comes in. If something were to happen to them, including death, while working for you, then you are liable to pay for their medical bills and work benefits.

One can combine Workmen’s Compensation with a Group Life policy at a nominal cost thereby providing your employees with a safety net in case something were to happen to them outside of working hours.

6.    Business Interruption Insurance

Sometimes, events can unfold that can interrupt the working of your business such as a fire. And not being able to operate your business results in loss of income.

Business Interruption Insurance provides compensation for days where your business lost its income. This will help you pay the employees or pay off any standing dues that were caused when your business wasn’t able to operate.

The coverage of Business Interruption Insurance is based on the past records of business income. The extent of coverage is determined by the insurance provider. With a really good insurance provider, you can even get coverage for transport costs that would incur if you were to move your business to a new place.

7.    Cyber Liability and Privacy Insurance

If your business delves in digital technologies or services, then you will definitely need a Cyber Liability and Privacy Insurance. The insurance will cover the losses that happen to your business due to data breaches or cyber crimes against you.

Since more and more businesses are adopting the online business model, the need for Cyber Liability and Privacy Insurance carries more weight than ever before.

8.    Vehicle Insurance

In the UAE and many parts of the world, vehicle insurance is mandatory. If your business own more than two vehicles, you are eligible for fleet insurance. The benefit of choosing fleet insurance is that it a single insurance that can be applied to all the vehicles.

It saves you both time and money, plus you don’t have to bother with individual insurances and their paperwork. The ease of use is also felt when claims are made as the process is much quicker and easier.

Choose the best for your business, we are at your service!

Starting a business can be nerve-racking, and choosing an insurance policy can be confusing. However, they are important for the sustainability of your business.

Leave the hard work to us, we will help you choose what is best insurance policies for your business. Our experts will review your business and suggest the best insurance policies based on the type of your business and growth stage from the best insurers in UAE. Contact New Age Insurance Brokers today and grow your business today.

Why You Should Review Your Insurance Annually

We all know the importance of insurance coverage on the various assets we possess ranging from our houses to the automobiles that we use to travel. Insurance coverage is taken on your life, family, education, and what not. All of this is because of the fact that we do not want to end up without it when something bad befalls us.

But insurance coverage isn’t a once in a blue moon thing that you can avoid caring as soon as you opt for one. Just like the frequent assessments that you conduct for all your possessions, insurance too needs to be reviewed at regular intervals. And you don’t have spend days on it, just a few hours once in a year will do!

Now let us delve into why an individual or an enterprise should revise their insurances annually.
To review the changes in circumstances
One of the prime reasons why one needs to review their insurances frequently is to inform the insurance company about the changes that you and your condition or the objects that you have insured have undergone during that time period. It can be anything from an upgrade on the value of the assets to the addition of a new driver into the clause. Adding this new information into the insurance clauses can ensure that your insurance holds good when the need arises and saves you from the headaches of claims not being paid out in case the necessary details were not furnished in a timely manner.
To avail any discounts or other offers
This is one of the best reasons why you should review your insurances annually. Over time, there might be discounts and bonuses that these insurance companies provide their customers with. Being updated about these benefits at the necessary times can be used to plan your insuring of assets wisely and lead to saving more money.

Discounts and offers include special rates for existing customers, lower rates for insuring more than one automobile with the same insurance provider, the status of usage of an automobile that you have insured and so on. Don’t let these opportunities to miss through your fingers due to negligence.
To notice the surge in insurance premiums
Most of the customers might have programmed their insurance such a way that it is deducted from their bank accounts at the required intervals. For the same reason, they fail to notice the surge in prices that have been affecting their insurance policies.

The increase in prices can be because of many reasons like the increase in government taxation which are legitimate as opposed to the totally ridiculous reasons some providers have for the increase in its policy premiums. So the timely review of the insurances can make the customer more aware of the current rates.
To ensure the status, relevance, and performance of the policy
Some policies get outdated over time in terms of the coverage they provide and the various exclusions in a policy. The conditions and clauses change and the policy that once suited you and your assets may not be the ideal option to cover it. In such cases one must go through the current policy and contact the provider to discuss new policies/clauses that have come up and can be beneficially added to the insurance policy. Any policy or clause that is not beneficial must be revoked and a new one must be adopted.
To ensure the best life insurance policy
Unlike other policies, one of the policies that customer needs to check and review frequently is the life insurance policy. Life, as we know, undergoes constant changes and so should the policy that covers it. Marital status, a new member being born, the health status of the insured, current occupation and so many other life situations have a say in the type or amount of insurance one must choose to cover their lives.
Bottom line…
Taking care of all these facts and the timely review of the insurances will give you the peace of mind you expects when you sign up for an insurance policy. As the saying goes it is always better to be cautious and be happy than lament about missed opportunities.

There is no need to panic if you haven’t gone through your insurance policies in a while, we are here to help you out. Contact New Age, the leading Insurance Brokers in Dubai to know how you can improve your existing plans or choose the best one if you haven’t already! Our experts are here to help!

Keyman Insurance: Why is this insurance a must have for business owners?

Small and Medium Enterprises (SMEs) i.e. businesses with a turnover of less than AED 250 Million are the backbone of Dubai’s economy, representing 95% of all establishments in the Emirate. These SME businesses account for 42% of the workforce and contribute around 40% to the total value add generated in Dubai’s economy.[1] The power behind this engine is the business owner/key person.

Defining Keyman Insurance

It is the dream, vision and risk-taking ability of the owner that gives birth to the business and through his hard work, it flourishes. Banks lend to and suppliers work with the businesses because of the ability of the owner/key person to make profits and keep financial commitments.

While a business normally insures all its assets (building/stocks etc.)  However, it sometimes forgets to insure is most valuable asset – the KEYMAN.  Keyman could be the Founding Owner / Director / Key Technical Personnel.

Keyman Insurance protects businesses from falling in the hands of creditors/banks in the event of untimely death of the key person.  In such a situation, insurance policy will pay off to the creditors / banks and business can be passed on to the next generation – debt-free.  Of course, all loans are secured – but if all assets (which are under lien to the creditors/banks) go to repay those liabilities, what remains for the family?

Keyman Insurance is the cheapest form of ensuring that family / remaining shareholders get business without any liabilities, market is assured that it is business as usual and that their funds are secured in CASH and not through sale of assets.

Cost of Keyman Insurance is negligible and most organizations add it to the cost of borrowing.

Following diagrams illustrate this concept:

[1] THE STATE OF SMALL & MEDIUM ENTERPRISES (SMEs) IN DUBAI: A report by Dubai SME An agency of the Department of Economic Development

 

How does Keyman Insurance Work?

For the Key Employee

A company purchases a life insurance policy on the key employee, pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The purpose of Keyman insurance is to help the company survive the blow of losing the person who makes the business work. The company can use the insurance proceeds for expenses until it can find a replacement person.

For the Partnership

Keyman Insurance in partnerships can be used to stabilise business in the event of death of a partner.  Company insures all the partners in the proportion of their share in the firm.   Company pays the premium.  In the event of death of a partner, insurance proceeds can be used to pay deceased partner’s share in the business and surviving partner inherits the business.  This arrangement avoids having to sell off company assets to pay for deceased person’s share.

Having Keyman Insurance is a very effective arrangement as most of the organisations do not have their assets in cash to take care of such contingencies and moreover, surviving partners may not wish to do business with deceased partner’s spouse and vice versa.

How we can help you

New Age Insurance Brokers is a fully-licensed (by the U.A.E. Ministry of Economy) insurance brokerage and represent many local and international companies of repute.  We will assess your need and place your coverage in the most cost-effective way.  If warranted, we may place business with one or more companies.