Business insurance – the basics
Your business needs insurance, that’s a given. But with so many different policies out there, where do you start?
Here, we run through some of the main types of business insurance and what they cover. It’s not a checklist, nor does it cover everything, but it’s a useful guide if you’re looking for the basics and want to know what’s what.
First, cover your people
Every business starts and ends with its people. To cover them and what they do, there are three policies you should know about. Consider them the ‘belt and braces’ of business insurance:
Professional indemnity insurance covers claims of professional negligence made against you by clients or third parties. This can be for giving wrong advice, the failure of a recommended service or a simple mistake that’s going to cost money to fix. Your policy covers your legal costs if you need to fight your corner, and any compensation or damages you have to pay.
Public liability insurance covers claims of physical damage to third-party people and property made against your business. Disaster scenarios include a visiting client tripping on a loose cable, injuring themselves and suing you for damages. Without public liability insurance, claims involving personal injury are never quick, easy or cheap to deal with.
Employers’ liability insurance covers claims against your business by your employees if, for example, they get sick or injured as a result of working for you. Every UK business with employees – whether they’re part-time, full-time, paid, unpaid, permanent or temporary – is legally required to have it. Big fines wait for those that don’t.
Next, cover your stuff
Arguably as important as your people are their tools of the trade. Keeping clients onside is so much easier when you can actually do what they‘re paying you for.
Office contents insurance covers your equipment from the risks of fire, theft, flood and accidental damage. A good policy should cover your portable equipment (laptops, mobiles etc) and the things you leave behind in the office (PCs, printers etc).
Then there’s the building you work in. Buildings insurance covers the actual bricks and mortar bit while business interruption insurance covers the costs of working somewhere else. This could be because something’s stopping you using your usual place (anything from a burst pipe to a natural disaster).
For businesses that use email, store customer data electronically or have a website, cyber insurance is essential. It covers the cost of repairing and restoring your systems, data and website following a breach or hack, and pays for legal costs and compensation if you’re sued for losing people’s personal data.
Personal accident insurance keeps your business ticking along if some unforeseen slip-up or accident stops you going back to work, while directors’ and officers’ insurance covers your bosses for claims of financial mismanagement, health and safety failure and breach of company law. All pretty hair-raising stuff.
The final word
What we’ve covered here is the tip of the iceberg. If you’re not sure what you need, it’s worth talking to a specialist insurance broker. They can run a quick risk assessment to see which policies you’d benefit from and advise you on your level of cover.
For more info on business insurance, a two-minute quote and 10% off your professional indemnity insurance, visit PolicyBee or speak to a friendly expert on 0345 222 5370.