An essential guide to business insurance

Business insurance is a simple way to buy various types of insurance cover in one package to protect your business when something unfortunate happens.

The types of cover that usually form part of a business insurance package include employers’ liability insurance, public liability and products liability, business interruption insurance, and buildings and contents insurance. These covers are designed to protect you, your business, your liabilities and satisfy your legal requirements as a business owner.

Having insurance to protect you financially against accidents, mistakes, theft, damage and legal fees is essential to provide you peace of mind when running your business.

Every business is different and therefore needs to consider the insurance covers that will protect it against the unique risks it faces.

Some of the key insurance covers small business owners should be aware of are summarised below:

If a business has employees, it is your responsibility as an employer to protect the health and wellbeing of your staff. One of the ways you can do this is by having employers’ liability insurance in place to comply with legislative requirements.

It’s designed to protect you against any claims for compensation following an injury or illness suffered by an employee if your company is found to be at fault.  It will also cover any legal costs if your insurance company chooses to defend your company’s position, as well as the costs and expenses incurred by the employee should you be found legally liable.

Any visitor to your business premises, whether they are an electrician, a courier, a customer or a member of the general public, can make a claim against you if they are injured or their property is damaged as a result of your business activities.

It is, therefore, the responsibility of the business owner to make sure that any claim for compensation from a third party is met. It could include loss of earnings, future loss of earnings, damages awarded to a claimant and any legal expenses that you could incur if you are found to be liable (up to certain limits).

If your business involves work on-site or at a third party’s premises, you will also need to consider public liability insurance.

We all strive for perfection, including in the products that we design, manufacture or supply to our customers. However, regrettably, things sometimes go wrong once they are sold. Product liability insurance can cover you for legal and compensation costs resulting from injury to people or damage to their property caused if the product is deemed to be defective.

Anyone who is involved in the supply chain of a product can be taken to court; this includes wholesalers, retailers and manufacturers. This cover is therefore designed to protect your business from the financial impact of a claim resulting from injury to people or damage to their property caused by products you manufacture, sell or repair.

The likelihood is you rely on computers, equipment, tools, and machinery to ensure the smooth running of your business. If any of these were damaged, lost or stolen, then contents cover would respond to reinstate your items following an insured event.

While business contents insurance is not compulsory, it’s important to consider how you could replace all of your belongings if the worst happened.

It’s also worth considering your fixtures and fittings and any stock you hold when thinking about your business insurance requirements.

Unfortunately, businesses are at risk from unforeseen events such as flooding, fire and theft. If the worst should happen, you may be unable to trade immediately following the event.

Business interruption insurance can cover you for loss of income suffered while you deal with the aftermath of such an event. In addition, and providing that your sum insured is adequate, it will take into account any growth in income that might have happened had the disaster not occurred.

Providing advice in a professional capacity can come with risk. No matter how careful you are, sometimes things don’t go to plan. Professional indemnity insurance is designed to protect your business in the event that a client suffers financial losses as a result of the work you do for them

If your clients rely on your expertise and your actions cause them financial loss, you could be personally liable to rectify the damage. Therefore, professional indemnity can give you peace of mind and financial security should something go wrong.

As technology continues to evolve, businesses are becoming more vulnerable to online threats and data breaches. Even businesses with the most stringent cybersecurity measures in place are still not safe. Cyber and data insurance can help to protect and support you if you fall victim to cybercrime.

If you have a website, hold personal data about your customers, suppliers or even employees, or rely on computer systems as part of your day to day business, then you have a cyber and data exposure that you may wish to protect. Cyber insurance is designed to provide you with crucial support if your IT infrastructure and data is compromised following a cyberattack.

Insurance is an intangible benefit to your business – a service that you have paid for that you may never get to use, but also a service that you hope that you will never need to call on.

But why wouldn’t you want to fully protect your livelihood, the business you’ve worked so hard to build? Whether it’s theft, fire, a cyberattack, or staff injury, incidents in the workplace can be costly and knock you off schedule.