Business Library

Insurance Requirements

What do you need to know about it?

Business insurance can be divided into two distinct areas:

Protection for the assets and liabilities of a business
Protection for the individual owners and directors of a business

There is necessarily a cross over between these two areas, but with all insurances, the following would be considered a sensible rule of thumb: compulsory insurances - those you must have - and those which could be regarded as essential, such as:

Protecting your product to enable a claim against anyone who infringes your intellectual property rights
Property - buildings and contents
Engineering equipment
Theft
Money
Goods in Transit
Business Interruption
Public liability
Product liability
Professional indemnity
Motor vehicles
Legal expenses

Other business insurances may include:

Credit insurance to protect against your debtors being unable to pay
Book Debts Cover - essential in case of loss of or accidental damage to books of account
Fidelity Guarantee Cover to protect against theft by dishonest employees
Covers for specific categories, which could include: Glass (most modern business buildings have large amounts of glass), Frozen food and other perishables, and other items which could spoil
Travel protection for individuals
Employment Practices Claims for harassment, discrimination, unfair dismissal of staff etc. including claims for emotional distress. Contact our Human Resources Consultancy for advice regarding any query you may have.
Libel and slander costs
Pollution defence costs
Legal expenses insurance regarding investigations into the business's affairs, even if there is no claim against directors or officers
Claims brought for example under Health and Safety Regulations, for Corporate Manslaughter
Protection for management and supervisory staff as well as directors and officers

There are also those occasions when a third party requires an individual or business to have professional indemnity; or, indeed, a landlord who requires buildings insurance as part of a lease. Insurance is about risk, how it is quantified, and ultimately how it may affect an individual or a business. It is sensible to look ahead and insure accordingly. A good independent commercial broker will be able to design a package suitable for your business needs. You can request a tailored quote from an independant broker today.

Compulsory insurance

By law any business must have Employers' Liability & Motor vehicle liability. Employers' Liability Insurance provides for your legal liability for injury, disease, or death sustained by employees and arising from their employment. The minimum legal liability is £2,000,000 and a certificate of employer's liability is required by law to be exhibited at each place of work. Motor Vehicle Liability provides for your legal liability for injury to third parties and their property as a result of using your vehicles on the road; this is essentially third party insurance as a minimum. Other levels of insurance can give added cover to the levels required. It is essential that the insurer is informed if you use your vehicle for business purposes. A fleet policy can sometimes be arranged for more than five vehicles. Premiums are related to the claims record! There are some insurance policies, which are not strictly necessary, but would be most sensible to have; they include:

Public Liability - protects you against claims to pay damages to members of the public as a result of the activities of a business

Product Liability - will cover you if you manufacture, repair or sell products, which cause damage or injury as a result of defects in their design or manufacture even if you have not been negligent.

Professional indemnity - protects against claims by a third party.

Directors' and Officers' liability

'Keyman' Insurance - for the financial protection of a business should a 'keyman' suddenly be unable through death, sickness or accident be able to work.

Personal Accident/sickness/medical

Make sure you are covered - request a quote for Business Insurance.

Claims

Hopefully, you will never need to make a claim. However, in the event that you might have to, be aware of what you must do. Some sage advice:

Know who to call - have the telephone number handy
Delay can be costly
Have a disaster recovery plan and make sure your key staff are aware of it.

Claims, as such, can have an impact on your premiums, so anything you can do to minimise the eventual cost of replacement or loss will be to advantage.

Where to buy insurance

Insurance can be bought from:

Tied agents
Independent brokers/financial advisers

Tied agents can only deal in the products provided by the company they work for. You have to do the sifting out of what meets your needs and is best value for money. Independent brokers/financial advisers have access to the whole market and can shop around to find the cover that meets specific needs and at the most competitive rates - they do the hunting for you.
It is worth bearing in mind that an insurance policy is only as good as the company, which would eventually have to meet any pay out. So, beware, cheapest may not necessarily be best. We've partnered with Marsh, the world's largest insurance broker, to provide YOU with professional assistance. For more info, request a quote today.

This is a guide. It may be helpful for you to also talk to a professional in Business Insurance.