New year, new start right? If you own a small or medium sized business you are likely to have invested a fair amount of money – not to mention time and energy – in building it up. If you are thinking about setting up, it's good to know what's out there before you start.
The business might be providing the entire livelihood on which you and your family depend – not to mention the livelihoods of all those whom you might be employing.
Safeguarding your business against a range of possible failures, unexpected costs and claims upon it which might lead to it going under is likely to take on a high priority. This is the task which business insurance sets out to do. Here is our business insurance guide.
Who might this product be suitable for?
If you are running a business there is no law to say that you must have business insurance – with the exception of employers’ liability insurance if you employ other people and motor insurance, of course, if your business operates any vehicles.
Nevertheless, both the website Small Business and the Association of British Insurers strongly recommend that any small to medium sized enterprise arranges business insurance.
What does it typically cover?
Business insurance is typically a package of several different insurances, the need for which may be determined by the type of business you own, its annual turnover, the number of people employed and any past business insurance claims you may have made.
Within those broad parameters, some of the elements of cover may include:
Public liability insurance: this is one of the core elements in practically any package, simply because of the size of possible claims and the risk of injury or property damage to members of the public, customers and other visitors to your business premises;
Professional indemnity insurance: as the owner of the business, you have a responsibility for exercising all due reasonable care in the way you conduct your business activities and services, so this element of cover is designed to indemnify you against aggrieved customers – it is especially important cover in such professions as accountancy, architectural services, IT specialists and management consultants;
Product liability insurance: you have a responsibility for ensuring that any product you supply or install does not result in personal injury or other loss or damage to the customer – an insurable loss needs to be shown, not simply a dissatisfaction with a product that fails to work properly;
Employers’ liability insurance: as previously mentioned, if you employ others in the course of your business, with very few exceptions, the law requires you to hold this cover against claims from employees who are injured, fall sick or have property damaged as a result of their employment – a minimum level of cover for claims up to £5 million is required;
Business disruption: this element of cover is for certain circumstances leading to the loss of normal earnings from your business – the circumstances may vary according to the insurance you arrange, but might include disruption caused by damage to equipment or your business premises by fire, flooding or storms, a breakdown of essential machinery, or customers being unable to gain access to your premises for some reason;
Cybercrime: an increasingly popular element of cover is designed to protect the computer systems of your business from hacking, viruses and other forms of cybercrime.
Is there anything I need to know?
Just as there are businesses of every imaginable shape and size, so it is possible to tailor your business insurance package to include any combination of different elements of cover.
This might involve your taking a long, hard look at exactly what your business does, its suppliers, its customers and some of the risks and perils you are able to identify.
Protecting your business against some of the risks and unexpected costs it may face has the capacity to affect many livelihoods. Business insurance may provide the defences you need.