Having the right insurance is vital for your business. You are legally required to have certain insurances, and knowing your business is properly covered means you can focus on running your business smoothly.
This National Insurance Awareness Day, we are looking at how to maximise your insurance protection and reduce the risk of issues with a claim. Here are 7 tips that can help protect your business, limit the number of claims you have to make and reduce your premiums.
1. Tell your insurer everything relevant
Make sure that you let your insurer know about circumstances that might affect their decision to insure you. This is called giving them a ‘fair presentation of your risk’.
Ask your staff and senior management if they’re aware of anything relevant (and search business records) when completing your insurance application, as you need to disclose anything you know about or should know about.
Providing false or incomplete information can lead to:
- your insurance claims being declined and/or premiums already paid being forfeited;
- cancellation of your policy or retrospective narrowing of the policy terms; or
- you being prosecuted for fraud.
2. Comply with health and safety law
Keeping your workplace safe by carrying out regular risk assessments and complying with health and safety laws and policies will help minimise the risk of accidents and fires. Check your security and fire systems are robust and train your staff to deal with emergencies, illnesses or accidents. Having a strong health and safety record not only keeps people safe and bolsters your business’s reputation, but it can also keep your insurance premiums low and assist if you are defending a claim.
Certain policies are required under health and safety law such as employers’ liability insurance and third party motor vehicle insurance and you should make sure you are aware of these. Other policies such as public liability insurance and product liability insurance can help you to protect your business from other health and safety risks. For detailed guidance about different types of insurances that your business might need, see our Q&A on business insurance.
3. Check your policies cover working from home
Staff working at home
Make sure your employers’ liability insurance policy covers any staff who work from home, along with any business-owned equipment they may be using at home.
Running your own business from home
If you’re running a business from home, check your insurance policy to see whether you need to notify your home insurer and consider what other business insurances you may need to run your business from home. Usually, a domestic home insurance policy won’t cover business-related losses, and failure to notify your insurers if you are running a business from home may invalidate a claim and/or cause your insurer to cancel your policy. This in turn could be a breach of your mortgage! Business equipment and cash should usually be insured under a separate contents policy.
If you will have visitors to your home you should consider public liability insurance to cover any accidents, injuries or damage to property. If you employ staff at your home you will usually need employers’ liability insurance.
4. Keep proper records
It’s important to keep proper records to assist you with making insurance claims (this might include board minutes, accident and illness logs, photographs of incidents, receipts for valuable assets, and more). Make sure you keep copies if you send original documents off with an insurance claim.
5. Don’t delay advising your insurer of a potential claim
Notify your broker or insurer as soon as possible about any workplace-related incidents (even if you don’t think you will end up claiming). Your policy will have rules about when and how to notify your insurer about incidents.
Failing to tell your insurer about relevant events in time can invalidate your claim. You’ll also need to cooperate with your insurer with their investigation where practical (eg they may need to inspect your business records and accounts).
6. Don’t agree next steps or liability
Don’t admit that an incident was your fault, or agree next steps with the person who is claiming against you (other than emergency measures to minimise the loss), until you have spoken with your insurer.
7. Consider run-off cover
If you have professional indemnity insurance and decide to close down your business, consider whether you might need ‘run-off’ cover to deal with future claims for a few years following closure.
Check out our detailed guidance on insurance for more information.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.