Insurance
This query is : Resolved
20 April 2016
Sir, if we did insurance of company then what thing's come under insurance .
Ex. Buliding , material, employees etc.
01 August 2024
When a company takes out insurance, several aspects and types of insurance can be involved. Here’s a breakdown of common types of insurance and what they typically cover:
### **1. **Property Insurance:**
- **Building:** Covers damage or loss to the physical structure of the building due to fire, flood, earthquake, etc.
- **Material/Stock:** Covers loss or damage to inventory or raw materials due to risks like theft, fire, or accidental damage.
### **2. **Liability Insurance:**
- **Public Liability:** Covers legal liability for injuries or damages to third parties occurring on your business premises.
- **Product Liability:** Covers legal liability for damages caused by products sold or supplied by your company.
### **3. **Business Interruption Insurance:**
- **Loss of Income:** Covers loss of income due to business interruption caused by events like fire, flood, or other disasters.
### **4. **Employee Insurance:**
- **Workers' Compensation:** Covers medical expenses and compensation for employees injured during work.
- **Group Health Insurance:** Covers medical expenses for employees and their families.
### **5. **Vehicle Insurance:**
- **Commercial Vehicles:** Covers damage to vehicles used for business purposes.
- **Fleet Insurance:** Covers a fleet of vehicles under a single policy.
### **6. **Professional Liability Insurance:**
- **Errors and Omissions:** Covers legal costs and claims related to professional errors or negligence.
### **7. **Directors and Officers Liability Insurance:**
- **D&O Insurance:** Covers directors and officers against claims for wrongful acts in their capacity as company executives.
### **8. **Cyber Insurance:**
- **Data Breach:** Covers losses related to data breaches or cyber-attacks.
### **Accounting Treatment for Insurance in Tally:**
1. **Premium Payments:**
- **Debit:** Insurance Expense Account (e.g., `Insurance - Building`, `Insurance - Vehicles`, `Insurance - Employees`)
- **Credit:** Bank/Cash Account
2. **Claim Receipts:**
- **Debit:** Bank Account (or other asset account)
- **Credit:** Insurance Claim Receipts Account (if separately tracked)
3. **Accruals:**
- If the insurance premium is due but not yet paid:
- **Debit:** Insurance Expense Account
- **Credit:** Insurance Payable Account
### **Examples of Entries in Tally:**
1. **Recording Insurance Premium Payment:**
- **Date:** [Date of Payment]
- **Debit:** Insurance Expense Account (e.g., `Insurance - Building`, `Insurance - Stock`)
- **Credit:** Bank Account
2. **Recording Insurance Claim:**
- **Date:** [Date of Receipt]
- **Debit:** Bank Account
- **Credit:** Insurance Claim Receipts Account (if applicable)
### **Summary:**
The types of insurance and their coverage depend on your company’s specific needs. In Tally, record each type of insurance premium under the appropriate expense account and handle claims as income or asset receipts.
### **1. **Property Insurance:**
- **Building:** Covers damage or loss to the physical structure of the building due to fire, flood, earthquake, etc.
- **Material/Stock:** Covers loss or damage to inventory or raw materials due to risks like theft, fire, or accidental damage.
### **2. **Liability Insurance:**
- **Public Liability:** Covers legal liability for injuries or damages to third parties occurring on your business premises.
- **Product Liability:** Covers legal liability for damages caused by products sold or supplied by your company.
### **3. **Business Interruption Insurance:**
- **Loss of Income:** Covers loss of income due to business interruption caused by events like fire, flood, or other disasters.
### **4. **Employee Insurance:**
- **Workers' Compensation:** Covers medical expenses and compensation for employees injured during work.
- **Group Health Insurance:** Covers medical expenses for employees and their families.
### **5. **Vehicle Insurance:**
- **Commercial Vehicles:** Covers damage to vehicles used for business purposes.
- **Fleet Insurance:** Covers a fleet of vehicles under a single policy.
### **6. **Professional Liability Insurance:**
- **Errors and Omissions:** Covers legal costs and claims related to professional errors or negligence.
### **7. **Directors and Officers Liability Insurance:**
- **D&O Insurance:** Covers directors and officers against claims for wrongful acts in their capacity as company executives.
### **8. **Cyber Insurance:**
- **Data Breach:** Covers losses related to data breaches or cyber-attacks.
### **Accounting Treatment for Insurance in Tally:**
1. **Premium Payments:**
- **Debit:** Insurance Expense Account (e.g., `Insurance - Building`, `Insurance - Vehicles`, `Insurance - Employees`)
- **Credit:** Bank/Cash Account
2. **Claim Receipts:**
- **Debit:** Bank Account (or other asset account)
- **Credit:** Insurance Claim Receipts Account (if separately tracked)
3. **Accruals:**
- If the insurance premium is due but not yet paid:
- **Debit:** Insurance Expense Account
- **Credit:** Insurance Payable Account
### **Examples of Entries in Tally:**
1. **Recording Insurance Premium Payment:**
- **Date:** [Date of Payment]
- **Debit:** Insurance Expense Account (e.g., `Insurance - Building`, `Insurance - Stock`)
- **Credit:** Bank Account
2. **Recording Insurance Claim:**
- **Date:** [Date of Receipt]
- **Debit:** Bank Account
- **Credit:** Insurance Claim Receipts Account (if applicable)
### **Summary:**
The types of insurance and their coverage depend on your company’s specific needs. In Tally, record each type of insurance premium under the appropriate expense account and handle claims as income or asset receipts.
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