Setting up and managing a business is expensive and time-consuming, so it can be tempting to have the minimum insurance necessary. However, with all of the hard work and investment you have out in, it makes good sense to have insurance that avoids the risk of losing everything.
These are the main types of business insurance:
This is the legal liability to pay damages from injury, illness or disease contracted by a third party or member of the public (other than employees) and also covers loss of or damage to their property caused by your business practices.
Public liability insurance protects your business from unexpected financial loss. Claims can be very high and you may not have the finance to cover this without insurance. You are legally required to have cover for a minimum of £5 million, but the preferable cover is £10 million, to ensure sure that all potential costs are covered.
Employers liability insurance is compulsory for businesses that employ one or more staff. This type of cover is there to help you protect your employees while at work, and to reinforce your health and safety procedures. If an employee is injured or becomes ill as a result of their job, they are entitled to claim compensation from the business if it can be proven that it was the fault of the employer.
If you do not take out Employers liability cover you could face a £2,500 fine for every day that you weren’t covered. This fine can be backdated so it could be very costly if you dont have the correct cover, which legally is a minimum of £10million.
Professional indemnity insurance protects business such as solicitors and architects against any legal action by clients who believe they received bad or negligent advice or services, and incurred a loss as a result. Most professional bodies have this type of cover and in some industries it is compulsory. Anyone supplying advice or consultancy services should consider professional indemnity.
The risk of legal action can come from:
Depending on the type of business you operate, you may wish to take out extra protection by way of specialist business insurance policies. Your considerations may include:
We hope this guide has been of use to you. Remember the golden rule is to always compare business insurance policies against each other and be truthful during the process.