Business Insurance

Business insurance is a type of protection that will help you deal with risks related to your business. The kind of risks that you are protected against and the level of protection depends on the type of business you are running. In return for this protection, the insurance companies charge you a monthly or annual fee (premium) which is based on an evaluation of the risks your business faces as well as the level of protection you are after.

 

Why is business insurance important?

Business insurance provides a financial protection when certain specified events occur by making your insurance company pay for the consequences of those events. By paying monthly or annual affordable sums to your insurer; you protect yourself from having to pay out a large unaffordable sum in one go.

Business insurance is really important if you have a small company because small companies are especially at risk of becoming insolvent if a large claim is made against them.

 

What are the different types of business insurance?

Business insurance can fall under one or more of these categories:

  • Building and content insurance: Protects your business premises and any business-related items within them from risks such as fire, flooding etc.
  • People insurance: Protects you, your employees and any other person related to your business.
  • Public Liability insurance: Protects you from your liabilities such as liability for damages to customer’s property.

 

Is it compulsory to have business insurance?

There are certain types of insurance covers which are compulsory for most businesses:

  • Employer’s liability insurance: You must take out if you have one or more employees working for you.
  • Motor insurance: You must take out if anyone related to your business uses a motor vehicle (such as motorbikes, cars, vans etc) for work. You must have third-party motor insurance and your insurance must cover you for a minimum of £1million for property damage and provide unlimited cover for personal injury. If cars are an important part of your business (for example if you run a delivery business) then you will need to take specialised insurance cover.
  • Professional indemnity insurance: This insurance is not strictly required by law but professional businesses (such as lawyers, accountants, architects etc) take it out to protect themselves from the consequences of giving their clients’ bad advice.

If you fail to buy an insurance which is compulsory for your business; you could get fined a large sum of money for every day that you did not have protection.

 

How do you buy insurance?

There are two methods for buying insurance:

  • Directly from insurance companies: This can be done through either the insurer’s website or any comparison websites. This method is ideal for businesses that require standard or general business insurance.
  • Through brokers: Brokers are experts in insurance.  They can advise you on the right cover, find the best deals, find specialised insurance or tailor a cover that will suit your business needs.