As a business owner, your responsibilities extend far beyond the tasks at hand – whether that is providing services or selling goods. You are responsible for the safety of your staff, your customers and the products you sell. On the off-chance that something bad happens, the business will bear the brunt of the responsibility and be liable for any costs too. This is where business insurance comes in.
Buying business insurance is an administrative activity that may fall to the wayside because of its perceived difficulty – but that perception is no longer true in many circumstances.
First things first – Do you need business insurance?
Insurance is made to aid in the mitigation of risks that all organisations confront. There are three primary factors to think about when deciding if your company needs insurance. There is a bit of legalese speech coming up now, but not too much hopefully!
- Your potential liability for claim expenses —The cost of a claim, whether it’s one made against you or one you need to make, will almost certainly significantly exceed the cost of your insurance premiums. Having company insurance in place could end up saving you money if you depend only on your own revenue.
- Your legal responsibilities—In the United Kingdom, only employers’ liability insurance is required. You need to get this insurance if you have employees. If you don’t have it in place, you might have to pay a fine.
- Having insurance may also help you meet the requirements of others before entering into business relationships with clients, investors, associations, or even workspace providers.
Thanks for the information so far, I hear you say – and thank you, I’m very grateful you are finding this guide useful. So the next likely question you have is: Can you recommend a good insurance plan?
Unfortunately, we cannot recommend an insurer for you or your business – this guide is purely for informational purposes, and is not meant to be taken as advice or recommendation. This is because we are not insurance brokers or agents – we just have awesome offices for rent!
there are of course many sources of further information and indeed advice at registered, licenced insurance companies and agencies. Plus there are several online price comparison sites, that list business insurance as one of their key selling products. This makes sense because, as we mention above just about every business will actually need insurance.
The insurance you require is generally governed by the type of work you conduct, yet there are several types of coverage that are acceptable for practically all firms.
Social responsibility
This protection is essential if your job requires you to interact with the public (clients, customers, couriers, etc.). it’s one of the most common types of company insurance.
Public responsibility
This covers legal and compensation costs if a member of the public is injured, or has their property damaged, owing to your business’s negligence.
Public liability insurance would pay for the claimant’s legal fees and any compensation they might need if, say, a passerby stumbled over a computer cable and broke their wrist and ankle.
Liability of Employers
According to the Employers’ Liability (Compulsory Insurance) Act 1969, each company operating in the United Kingdom with any employees, whether permanent, temporary, or contract, must have employers liability protection (EL). Similar to public liability insurance, employer’s liability (EL) protects your firm from legal and compensation obligations in the event that an employee is hurt or their property is harmed while on the job.
Personal Injury
Personal injury from inadequate training, stress-related psychological problems, and property damage from inadequate safety gear are all examples of circumstances that could give rise to an EL claim.
If you have employees, whether they work from home or in an office, you need this protection. The Health and Safety Executive (HSE), who enforce the rule, may levy a daily fine of up to £2,500 for each day if the required insurance coverage was lacking. According to their rules, a punishment of up to £1,000 is possible if the insurance certificate is not prominently displayed or made available to HSE inspectors upon request.
Commercial Property Insurance
Insurance for business belongings safeguards against the destruction, loss, or theft of essential office supplies and machinery. Tools, computers, and other gadgets fall under this category. With this protection in place, you can get back to work as soon as possible if you lose or damage a portable piece of technology or equipment you rely on for your business and need to replace it.
Indemnification of Expertise
If you do any kind of contract work, you need have professional indemnity to protect you from legal liability and compensation claims related to your job. Your company is covered against allegations of libel, copyright/trademark infringement, design faults, wrong advice, defamation, and plagiarism if you give consulting services.
Professional indemnity
Professional indemnity insurance is a good idea for anyone who interacts with the public or performs a service that could lead to monetary loss, including but not limited to designers, consultants, accountants, healthcare professionals, and architects.
Online liability
Online, or Cyber liability insurance is a growing necessity, but it’s easy to miss the hazards that come with storing and processing data. Damage to your reputation, lost customers, and lost revenue might arise from a breach in cyber security that affects your systems or those of your suppliers.
Even if you don’t believe hackers specifically target SMEs, you should know that 38% of SMEs experienced a cyber breach or assault in the previous year, with the average cost of an attack being over £8,000.
If a company’s website goes down because its web host is under assault, that would be an example of a cyber claim. Even if a third-party site caused the outage, a cyber policy may cover the company’s expected earnings lost during the delay.
Or perhaps one of your employees opens a phishing email and lets ransomware onto the firm network, encrypting all of the files. You may be able to recover some of your lost revenue from a cyber policy’s ransom payout.
What are the next steps?
Doing some homework is recommended before making any major purchases. When choose between insurers, it’s important to weigh the pros and cons of each one, including any features that set them apart. Consider factors including cost, flexibility of payments, depth of protection, accessibility of support staff, and ease of filing a claim. The insurers aren’t likely to list a lot of these stats on their websites, so a review site like Trustpilot is usually the best bet to get an honest picture of the quality of service.
Here are some potential inquiries:
Does the insurance offer subscriptions on a monthly or yearly basis?
Is the insurance they provide adequate for my company’s needs?
Can I reach them via phone, email, or instant message?
When I file a claim, how long till I hear back from them?
Don’t hesitate to give precise details about your company.
It usually just takes a few minutes to get set up for online shopping when you’re ready to make a purchase. You should be prepared to answer questions about your business, including what you do, where you do it, and how much money you plan to make in the next year.
If you need to file a claim, having provided precise information will ensure that you receive adequate compensation, and if you don’t, you’ll avoid overspending.
Maintain consistent policy updates.
Our final bit of information for you is that successful businesses make sure their coverage is still enough as their firm evolves. A major increase in turnover, a launch of a new product or market or an increase in workers on the books are all causes for revisiting your policy. Make sure it covers what you need it to, and usually the premiums do not increase much.
Disclaimer (for repetition)
So there you have it – an informational guide about business insurance. We just have to mention again, to make sure we are crystal clear here – This is not advice, and we will never provide advice on any insurance product. If you have any questions, please reach out to a registered insurance provider.