What is Partnership Insurance? Do I need it?

partnership insurance

Partnership insurance is a well-designed insurance plan for businesses that are run by two or more partners.

In the UAE, numerous businesses are set up as partnerships. However, rarely do the partners realize the implications of what would happen to the business and the family members if one of the partners gets severely ill or dies. Would the business suffer a loss either through reduced revenues or monies stuck in the market? Would the deceased partner’s shares get passed on to their next-of-kin who may not be interested in running the business at all or might not have business acumen and technical skills to support the business like the previous partner?

Fortunately, policies like partnership insurance allow for partners to be ready for this eventuality. This type of insurance also safeguards the business in the scenario where one of the partners survives the accident or illness but chooses to leave the company.

Is it necessary to buy partnership insurance?

Understandably, no one wants to think about tragic events while running a business with a partner. But, not planning for it properly might result in undesired outcomes after an unfortunate event in the future. Not being prepared for such events means your business can fall apart quickly once your partner gets out of the business due to any of the following reasons.

Death

In case of the death of one of the partners, a partnership insurance plan will give the business a cash payout. It will allow the remaining partners to buy the shares back from the family of the deceased partner to regain full control and business continuity. This is beneficial for the deceased partner’s family as well as they are able to liquidate their holdings in the business and live a dignified life in the absence of their family member.

In addition, this lumpsum payout enables the remaining partners to find a suitable replacement (partner or an employee) and bring him/her on board without worrying about hefty salaries as the business will have the luxury of cash sitting in the bank account.

The cash flow resulting from the death of a partner, into the business, also gives confidence to the vendors, clients, and other business partners that the business will be able to tide over difficult times and come out stronger on the other side.

Critical Illness

If one of the partners falls critically ill, then a cash payout is made to the company. This helps the business in many ways. Firstly, it enables to critically ill partner to get medical attention and be able to take the time off without a significant impact on his personal finances. In addition, if the partner needs to take a medical leave of absence or is working with the company at reduced capacity, it enables the business to hire the necessary people for the business operations to go on as smoothly as possible.

In short, a partnership insurance policy is a guarantee that your business would be least impacted by the death or illness of a partner and that the business can carry on its operations profitably.

At New Age Insurance Brokers LLC, you will find the most trusted insurance advisors who will help you to make sure that your business remains protected should any partner of your business get out of the equation. To know more about partnership insurance, feel free to contact us at info@newageib.com.

5 common myths of travel insurance that you need to be aware of!!

Travel Insurance

What do you do when you are on a vacation and an unavoidable medical emergency happens? You will probably contact your relatives and friends for help or will visit the local medical authorities for treatment. How do you take care of the related expense? Your medical insurance does not cover you outside your country of residence. A very inexpensive travel insurance can help you deal with these and other unfortunate events that might happen while you are on a vacation.

It is this type of insurance that will help manage many uncertainties associated with travel. The insurance will cover the emergency medical costs in case of an accident, assist if your traveling document if lost, manage costs related to canceled and missed flights and many more. Overall, travel insurance will be a protective layer for your journey.

The benefits are several but there are some myths in the minds of the people that prevents them from using the same. Let’s discuss these myths and bust them.

 

Myth 1#

Medical insurance or other life insurance is enough

Medical insurance will look after all your medical issues only if it covers the countries you are traveling to. Typically, medical insurances are not sufficient. Not only that, what about other problems that you may face in the journey. Travel insurance will cover a lot more than medical issues.

 

Myth 2#

You have to take an individual policy for everyone in the family if traveling together

If you are traveling with your family, you can choose a family policy that covers all family members which includes family children below age 16. In addition, if you travel regularly with your family, you can choose an annual policy and use it whenever you plan your vacation. However, a ‘family’ policy can be invalid if family members are travelling independently or if the children are travelling with someone not named on the policy.

 

 Myth 3#

Can buy insurance later

People wait for the last minute to take the policy or after they have travelled because they are afraid of the premium amount. The premium amounts don’t change whether you purchase in advance or last minute. Also, the difference in premium amounts before you have travelled and after you have started your journey is minor and not worth the risk. We highly recommend taking the policy at the time of booking your trip.

 

 Myth 4#

Travel insurance is just for adventurous people

Some people love adventure and high-risk sports and activities during their travels. But it does not mean that they are the only ones should avail travel insurance. The terms and conditions are different for different travelers so even if you are not into adventure sports, you can apply for travel insurance. Such a policy will cover you against various travel risks such as lost or stollen luggage, cancellation cover (should you not be able to travel due to unexpected medical reasons) and most importantly, unexpected medical costs abroad.

 

Myth 5#

Filing for a claim is difficult

While you are away from your home and need to file a claim under your travel insurance policy, people often think that it is difficult to contact the insurance company. They also have the mind-set that the response will be delayed. However, if you have bought a travel insurance from a highly rated insurance company, you will not have trouble reaching the insurance company or filing a claim with them.

 

So now that we have busted some myths around travel insurance, make sure that you carry it along with you in your next adventure. You can also reach out to us at info@newageib.com to learn more.

All about Directors and officers (D&O) liability insurance: The what, who and why

Director and officer

If you are the Director or an officer of a company then you have a high-risk profession because if held liable for your own or other Directors’ decisions, you could face a huge loss through litigation from competitors, shareholders, creditors, or various other regulatory bodies.

So, in order to safeguard your company and its major decision-makers from the threat of being held legally responsible or sued for any sort of negligence, malpractice, or accident, you can rightly use this type of Liability insurance i.e. a Directors and officers (D&O) liability insurance.

But wait, what exactly is this liability insurance? Here’s an overview of Directors and officers (D&O) liability insurance.

What is D&O liability insurance?

Directors and officers (D&O) liability insurance protect the personal assets of business directors, officers, as well as their spouses when senior members of a company are held legally responsible by their employees, competitors, customers, vendors, investors, or other parties for actual or alleged misconduct in managing the business. D&O liability insurance comes to the rescue and offers them extensive coverage.

Who are the persons covered under D&O liability insurance?

The Directors and officers (D&O) liability insurance can cover the following individuals:

  • The officers and directors employed by the company
  • The risk manager who is also the employee of the company
  • Officers and directors of the subsidiary companies
  • An employee of the organization who is working in the supervisory or managerial department of the organization
  • Independent directors and officers
  • The secretaries of the organization
  • Non-executive directors
  • The employee (excluding the officer or director) of the company who is acting as a lawyer on behalf of the organization.

Simply put, the Directors and Officers insurance applies to all those people who hold supervisory as well as managerial positions in the company. This includes employees, Board of Directors, or any other person who is a part of the company’s management.

Why there is a need for Directors and officers (D&O) liability insurance?

There are a plethora of good reasons on why you definitely need D&O liability insurance. Discussed below are some of the significant ones.

  • D&O liability insurance helps meet various legal and regulatory requirements.
  • It helps in the case of accounting misconduct and financial fraud.
  • It is very much required when cases related to sexual harassment are made against an officer or the director of the company.
  • It covers all the legal costs in case a Director or Officer covered in the policy issued.
  • It is needed when the major assets of the company are mistreated or when the company’s funds are misused.

Today, there are many companies that believe they don’t really need D&O liability insurance. But when one considers all the aforementioned reasons, one realizes that there is actually not a single reason for a company not to opt for D&O insurance. Always remember that not purchasing this insurance coverage might be risky as only a single D&O claim can ruin all the personal assets of a company and the organization may incur a great financial loss.

What are the various factors that determine the premium you pay for a D&O cover?

  • The financial condition of the company
  • Business activities / Specific industry
  • Quality of management/experience of management
  • Diversity of business activities
  • Length of time in business
  • Mergers and acquisitions
  • Organizational structure
  • International operating exposures
  • Claims history

For more information about D&O insurance, talk to a consultant at New Age Insurance Brokers or e-mail us at info@newageib.com to help you through the process of negotiating and purchasing the right coverage for your business needs.

Workmen’s Compensation or Group Life: which to choose and why?

Workmen's Compensation Insurance

Workmen’s compensation and group life insurance policies are essentially rewarded packages that are beneficial for both the employees and employers as it helps employees to replace income at minimal cost to employers at the time of need. We will describe the benefits of both workmen’s compensation and group life insurance and highlight the differences so you are able to assess what reward package makes the most sense for your company.

Workmen's Compensation Insurance

What is Workmen’s Compensation Insurance?

Workmen’s Compensation Insurance also known as Employer’s Liability insurance is a liability policy to compensate employees for bodily injury or death due to accidents or occupational disease arising out of and during the course of employment.

In the UAE, the Federal Law has mandated employers to provide employees with medical, disability and death benefits for any accident, injury or death caused at or by the workplace. Without adequate cover, your company may be liable for large payouts encompassing medical, loss of earnings and related costs.

At the time of a claim, the payout of the policy depends on the medical bills and other claim documents submitted to the insurance company subject to the agreed terms and conditions stipulated in the policy.

What is Group Life Insurance?

Group life insurance policy is a life insurance product to cover a group of people under a single contract. Just like workmen’s compensation policy, in a group insurance contract, the policy owner is the employer or an organization, and the policy covers employees or members of that particular organization.

A group life Insurance differs from workmen’s compensation as it provides a lump sum payment, as opposed to payments based on claims with specific limits, in the event of an employee’s death or permanent disability due to accident or sickness.

While not mandated by law in the UAE, group life insurance is one of the best ways in which an employer can instill a sense of security in the minds of the employees. Most employers often pay for the basic group life insurance themselves without burdening the employees. If the employees want additional benefits like critical illness coverage, then they may pay extra for the supplemental benefit.

Another advantage of group life insurance is that it is not territorial like workmen’s compensation insurance. Employees are eligible for the coverage worldwide, including their home country. In addition, the group life covers employees 24 hours a day, 7 days a week, 365 days per week. In short, employees are covered whether they are on duty or off duty, unlike basic workmen’s compensation policies which cover employees only during working hours.

In UAE, the employer can opt for a group insurance policy provided there is a minimum of 11 members working for the company.

So what should you choose for your employees?

Workmen’s compensation in case of a work-related accident is mandatory in UAE and an insurance cover is the most cost-effective means for an employer to meet this potential liability.

However, for a low cost, your company can opt for group life insurance that enables comprehensive coverage for your employees thus strengthening your image as a caring employer which in turn helps with employee retention. There are some group life covers that can also help you meet your workmen’s compensation obligations as required by the Federal Law.

Still unsure on which insurance coverage to choose for your business? Our expert panel is here to help you sort things out. Get in touch with us or leave an email, we will get back to you promptly.