Business insurance provides cover for your business against a range of possible financial losses and is designed to help you manage your business risks and keep trading in the event that an insurable loss occurs.
You pay your insurance premium in exchange for a commercial insurance policy, which is a document that explains in what circumstances your business will receive financial compensation from your insurance company.
How Do I Get Business Insurance?
Insurance policy wordings vary from one insurance company to another and are often long and complicated. They contain conditions and exclusions that can be difficult to understand.
It is therefore best to speak to an independent business insurance broker, who will help you get the right cover for your particular needs.
Take some time to think about what your business does and make sure that you have an accurate business description in mind.
What Business Insurance Do I Need?
There are many types of business insurance designed for businesses, property owners and professionals. What insurance you need depends very much on the type of business you run.
Six important types of business insurance that you should consider are as follows:
Employers Liability Insurance
If you employ anyone or are trading as a limited company, with more than one director, Employers Liability Insurance, for a limit of at least £5m, is a legal requirement. It protects you in case a member of staff has an accident, becomes ill or dies as a result of their job and your company is held to be legally liable.
173 employees were killed at work in the UK in 2011/12 and employers reported 114,000 injuries to workers in the same year, 24 000 of which were classified as major injuries.
For more information see: Employers Liability Insurance
Public & Products Liability Insurance
Public Liability insurance covers you for damage to other people’s property or injury to members of the public in accidents connected to your business. When a customer falls over and injures themselves on your premises, this can prove very expensive if they decide to sue you. The cover is not compulsory, but should be seen as an essential part of your insurance programme and may be required by some clients before they will deal with you.
Products Liability insurance covers the cost of defending claims and any compensation costs that your business might have to pay if products that you manufacture or supply cause injury to someone or damage their property.
Property Owners Liability insurance is also important if you own property that you rent out. It covers you for legal liability in case a member of the public has an accident on your premises.
You can insure your building, such as a workshop, factory, shop, office or industrial unit, against disasters such as fire or flooding. If you lease your business premises but have spent money on improving them, you can insure the improvements.
Stock and fixtures and fitting can be insured against damage and theft, as can any laptops, tools and equipment that you take out and about with you when working away or visiting clients.
Business interruption insurance covers your loss of income if your business premises or equipment have been damaged and you cannot trade. It is vauable cover to have and often overlooked.
In the event of a disaster, it will pay the income you would have made if you’d still been trading and can also pay the additional costs of moving to a temporary location. You can buy cover for up to one, two or three years depending on how long it would take to get you back trading again.
If you offer a professional service or give advice to customers, you may need professional indemnity cover.
Professional Indemnity insurance protects your business in case you find your company being blamed for a client’s financial loss and sued as a result.
For more information see: Professional Indemnity Insurance
Business Motor Insurance
If you use your vehicle for business purposes, make sure you are covered for business use. This might not be covered on your motor policy. If in doubt, ask your insurance company or get advice from an insurance broker.
If you employ anyone who uses their vehicle in your business, other than for driving to and from work, you should check that they have motor insurance in place that includes business use.