Whichever type of business you’re going to be in, it’s important to identify and mitigate as much risk as possible – to yourself, to your employees, and to your business.
Leaving a business uncovered and exposed to uncertainties is not a prudent idea, but understanding that is not enough. As a business owner sometimes it becomes very difficult to decide what insurance and how much cover you need to protect your business in those situations.
Certain factors such as size and type of your business, your premises, the risk your business expose to your customers, your insurance budget and whether any of your customers have requirements about what insurance cover you should have.
So we have put together the below information that can help you decide.
What business insurance do I need?
Although you will be working in your business keeping success in your mind, but it is also very important to reduce the financial burdens if the things don’t go as per the plan.
Business insurance which is a legal requirement is the basic insurance that you need, but there is little point in purchasing a “basic” cover that does not does not provide you with the level of cover you need. There are some other forms of combined commercial insurance that provide additional protections to your business against loss, damage, or claim against them for damage or negligence while performing business activities.
The thumb rule is to shop around and compare different business insurance policies for various premiums and cover they offer. But this can be a daunting exercise, where having a consultation with Airborne Financial Adviser can be worth the exercise. They can explain what kinds of risk might affect your business and how to mitigate them and wherever possible what type of insurance can cover the remaining risks.
There are four main categories of commercial insurance.
1. Liability insurance - including Employers Liabilitywhich is required by law if you employ people, whether they receive a salary or not. The other main liability covers are public liability insurance, products liability insurance, professional indemnity and commercial legal expenses insurance. These covers can either be bought with those below (as a commercial combined insurance), or as part of a combined liability insurance package. Employer’s liability insurance is required by law if you have employees and you must purchase a minimum of £5 million in cover – although many policies will automatically cover you for £10 million.
2. Building / Property insurance- including property owner’s liability. This is for the structure, not the contents (see below). It will also include cover for glass (fixed) and sanitary ware (toilets and sinks). Loss of rental, payable and receivable, is also insurable.
3. Business contents and computer insurance:at the business premises and whilst anywhere in the world. Policies will normally cover business contents, or fixtures and fittings, whilst at the business address only (temporary cover whilst cleaning is usually provided). You will need to specify the equipment to be insured away from the business address, such as laptops, mobile phones, PDA's and notebooks.
4. Business car and van insurance: There is legal requirement to insure against third party damage, including injury to persons. This relates to you or an employee driving a vehicle and causing injury or damage to another person (ie a third party) or property belonging to a third party (ie another vehicle or a building).
What else do I need to know about business insurance?
All the insurance contracts require you have a minimum level of professional indemnity insurance and public liability which is considered to be the starting point, however you may decide that you need more cover than the contract asks for.
For public liability and professional indemnity you will need to choose a limit of cover which is right for your business. Think about the type of work you do and what could go wrong in a worst case scenario – how much might it cost, especially if a dispute went to court. Buy a level of cover which you are confident will cover the cost of compensation you might have to pay.
And remember, because an Independent Financial Adviser can search a wide range of insurers you can be certain you are getting the most suitable deal available as per your situation.