“Fun is like life insurance; the older you get, the more it costs.” – Kin Hubbard
Business insurance is, in some cases, compulsory (whilst others are optional) and comes in many forms but examples could be public liability, employers liability, buildings and contents, vehicle, goods in transit or professional indemnity.
Take advice from a good commercial insurance broker who can guide you on the specific requirements for your business. The costs tend not to be too prohibitive, dependent on associated risks and type of activity, but shop around for the best deal.
Using specialist providers for different areas of insurance might be more cost effective and many will offer payment plans to make it easier. Being well insured is essential and, if not, any claim where you aren’t covered could spell the end for your business.
All employers must have employers’ liability insurance to protect the business from claims from staff that may have had an accident or become ill as a result of work. You can face fines if you are found to be inadequately insured.
You must have vehicle / fleet insurance for any vehicle which is either registered to the business or used for commercial activity associated with the business. As with private vehicles, this is compulsory and legal action will result from not having the necessary cover.
Professional indemnity business insurance is needed to protect businesses where they might be subject to legal action from people who believe they have been given bad advice. Within certain areas of business such as accountants, financial services and legal for example, it is compulsory to have this type of insurance and costs can be more substantial.
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Buildings and contents business insurance, whilst not compulsory, it would be wise to insure your business premises and everything in it such as stock, equipment and fixture and fittings. Protection against the usual perils such as theft, fire or flood are commonly covered as routine but you might want to consider other things that might be particularly relevant to your business.
If there is any potential harm (no matter how small) to the public from products or services you supply, you would be wise to consider public liability business insurance (which can incorporate product liability). This can cover damages, compensation and legal costs and protects your business against action taken should a member of the public suffer injury, death or damage to property as a result of the products or services you supply.
Other areas of cover which can be expensive but worth considering are –
Business interruption insurance – cover that help you keep trading in the event of a catastrophic or serious problem.
Key person insurance – specific cover for an individual (or key individuals) who is critical to the business and their absence through illness, injury or death could cause commercial loss. Often this can support the cost of interim personal until a suitable replacement is found.
Intellectual Property insurance – this is worth considering if the business will hold significant IP such as patents, design, trademarks and copyright. It can assist with legal expenses to fight infringements of any of the company’s IP. The legal costs are notoriously expensive with this kind of dispute.
You can find much more about business insurance on the Association of Business Insurers website and information and help to find a suitable broker, visit the British Insurance Brokers Association website.
Read the small print. Not all insurance is created equal, assess what you need and get the right cover.