Insurance can easily be overlooked but having the right level of cover is vital for any business and particularly a small business that is in its early stages. A small company has too much to lose and not enough assets to cover a potentially large insurance claim.
What are the priorities of a business insurance policy?
The type of insurance your business will require depends on what service you provide, what risks there are to your employees, when they provide that service and whether you deal with the public.
Most businesses will require professional indemnity insurance and employers’ liability insurance. Many businesses will also need public liability insurance and on top of this almost all firms will need insurance for their fleet of vehicles and office insurance for premises used.
Most businesses will require insurance cover for accidents, damage and theft. Additionally you must ensure that staff are insured to carry out any professional services and that your firm has public liability insurance if you provide a service that potentially endangers members of the public.
On top of this you need to make sure your premises, stock and commercial vehicles are also covered by insurance.
How much cover?
This depends on the size of your business but if a member of the public injures themselves, an insurance claim can run into hundreds of thousands of pounds.
It is important to have the right level of cover for any insurance policy, so just as you pay building insurance on your home to cover the cost of rebuilding your home and in the same way that you pay travel insurance to cover the potential cost of having a serious illness or injury when overseas, a business insurance policy needs to provide the level of cover that matches the potential liability.
Professional indemnity insurance
This type of insurance can protect you from a claim by a customer for problems relating to work carried out for them.
Most insurers can offer tailored professional indemnity insurance policies that relate specifically to the business area you work in. You need to ensure there is scope and flexibility to change the type of policy you have to match specific projects or jobs you are working on.
Public liability insurance
Public liability insurance covers you against potential insurance claims made by members of the public against work you have carried out for them.
This covers your legal liability to pay damages to someone who makes a claim against you for injury to them or damage to their property or other assets.
The insurance usually covers claims both within and outside of the workplace and also covers customers and suppliers and other third parties you may come into contact with through the nature of your business.
Employers’ liability insurance
This type of insurance is essential if you have any employees and covers you if an employee decides to make a claim against your business.
The difference between employers’ liability insurance and public liability insurance is that the first covers against claims from employees and the second covers claims from members of the public.
If an employee suffers an injury or even death at work, and a claim is made against your firm, employers’ liability insurance means you can make a claim on your business insurance to cover any costs you are deemed liable for.
If you work in a high-risk industry or with potentially dangerous tools or materials it is also essential to take out personal accident insurance as well.
Online fraud and internet viruses can potentially cripple the ability of your business to run smoothly.
CIFAS, the UK’s fraud prevention service found that in 2012, 80 per cent of identity fraud was carried out online showing how the internet is vital for fraudsters.
Most businesses depend on their online and email systems functioning correctly and that financial payments and bank accounts are adequately protected.
Cyber insurance can protect your business from online financial fraud, email hackers, viruses and electronic ID theft.
Bespoke and tailored insurance
As well as these four main areas that most businesses will need some protection for, there is a massive range of tailored and bespoke business insurance policies that can be adapted to the specific type of work your firm carries out.
Shops, tradesmen and small businesses could consider taking out business interruption insurance.
Types of specific business insurance that are available include tradesmen insurance, pub and restaurant insurance, shop insurance and insurance for home workers. Here is a brief look at some of the more common types below.
Your business premises could be your most valuable asset, so if you are an office based firm, office insurance is a must.
This will usually cover the contents of the office as well as the actual physical structure and as with most types of insurance a policy can be tailored to your requirements to provide cover for specific risks such as portable equipment and legal expenses.
Commercial vehicle insurance
If vehicles are essential to your business then getting the right cover for your fleet is important.
Commercial vehicle or van insurance can help protect your vehicles and drivers as they deliver your business objectives.
Cover for vehicles used for business purposes can be through third party, third party fire and theft or fully comprehensive.
This type of insurance is designed to protect tradesmen and contractors against risk of injury, claims for damages from clients for work carried out and to insure against loss, theft or damage to expensive tools and equipment.
Insurance is available for sole traders, partnerships and limited companies and is designed for people working as decorators, plumbers, plasterers, electricians and carpenters.
Landlord and property owners insurance
This protects your portfolio of buy-to-let or commercial properties and is often a prerequisite of being able to get a buy-to-let mortgage.
Landlord insurance can cover against damage caused by tenants, buildings insurance, fitting insurance and loss of rent.
Policies can be tailored to the types of properties you own and include, houses, flats, shops, warehouses and offices.
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