Searching for the right kind of business insurance can be very confusing and raise a lot of questions. You might be wondering whether your business needs cover for property, contents, public liability, contractor risks or motoring? The answer, of course, is that it depends on the nature of your business and at what stage of growth your company is at. Here is what to look for in a business insurance policy…
Legal Requirements
At present, there are 2 types of business insurance that are required by law in the UK. The first is motor insurance as all drivers are required under the Road Traffic Act of 1930 to have a motor insurance policy, even if it just covers Third Party damage. A common mistake made by businesses is to not crosscheck their Employers Liability Insurance with their motor insurance, which can leave you paying for areas of motoring insurance twice. Make sure that if have an extensive motor insurance policy that you are not just repeating driving clauses inserted in your Employers Liability Insurance, especially if your cover is with the same insurer.
Employers Liability Insurance
The second type of cover required by law is Employers Liability Insurance (EL), which is required under the Compulsory Insurance Act 1969. This ensures that your employees will definitely receive compensation if they are injured or become ill as a result of work that they have carried out for you. Even home businesses need to have Employers Liability Insurance if they employ 1 or more people. The minimum level of cover required is £5 million, but depending on the size of the business, most companies insure themselves for at least £10 million worth of cover. Companies that are found to be without Employers Liability Insurance can be fined up to £2500 per day and in some cases lose their right to trade.
Public Liability Insurance
EL insurance is not be confused with PL insurance. Public Liability insurance (PLI) covers a business against claims made by the public and not employees. PLI is not required by law, but is advisable if your business has regular and direct dealings with the general public. It is also sometimes a prerequisite for working with local authorities or councils.
Other Types of Cover
Property insurance is also advisable for businesses, as the loss of a building containing company equipment, paperwork, computers and furniture could completely devastate a business of any size. It is advisable to look into the fine details of any property insurance to make certain that you are insured against a wide range of potential situations, and that you are also covered to a level that is equal to, or greater than, the cost of replacing your contents. Loss of earnings and the interruption of business should also be included in any policy, as being able to replace destroyed contents is pointless if the business has gone under in the meantime from not being able to operate while the property is repaired.
You may also need Professional Indemnity (PI) cover if your business is providing advice, services or information that could lead directly to a client, or other business, losing money. This cover is also known as Errors and Omissions Insurance and is particularly advisable for law firms, accountants and consultants of any kind. Types of cover to look out for within this policy should deal with libel, defamation, loss of goods, breach of copyright, data loss and professional negligence.
Finally, you should always look through contracts that you have in place with other businesses, to find out if they require you to have a specific type of cover in order to do business with them. This is often a good starting point for building the right policy for your business. Also try to get hold of contracts that you may be aiming to have down the line, to see what cover you might be required to have in the future. Adding them to your policy at the start may be cheaper, and easier, than trying to write them into your insurance policy half way through a contracted period.
Still confused? For support and advice in gaining the right level of cover for your business, speak to a business insurance expert such as Bluefin Group for support and advice on all classes of cover, including property, employers liability, public and products liability, professional indemnity, contractors all risks, motor and engineering.
