A Beginners Guide to Business Insurance

In modern day life it’s not easy to avoid insurance in one form or another, whether this might be home insurance or cover for your car, you’re sure to need it somewhere.

Business InsuranceSurprisingly, there are still areas in which insurance gets overlooked as perhaps an unnecessary extra and one such area is business insurance. Some smaller businesses and self employed business owners may not realise that this cover is advisable and, in fact, in some areas is a legal requirement.

As with any insurance policy, the main principle on which insurer’s base their premium price is risk and, to this extent, every possible eventuality and its potentiality in relation to any given company is calculated to arrive at a policy cost.

You may not be able to predict the future when it comes to what could go wrong with your business further down the line but you can ensure that you are protected against common occurrences such as loss of your business premises or damage to your premises and equipment, lawsuits filed by employees and public liability claims.

Business insurance seeks to cover 3 main areas; legal liability, employee related risks and property loss/damage. It’s all too easy to assume that you will be able to foot the bill should something go wrong, but don’t forget, you might not have an incoming cash flow if your business has suffered a heavy financial loss or severe damage and the end result could be bankruptcy – harsh but all too true.

One of the major misconceptions when it comes to business insurance is that the self-employed do not need it. If you work from home and have valuable equipment and stock at the address, you will not likely be covered under your home insurance as this is designed to protect your personal possessions and domestic property.

If you have 1 or more person in your employment then you will also be required by law to purchase employer’s liability insurance (see Employer’s Liability Act 1969). This cover will protect you against a claim arising from a worker currently in your employment or by those who have been employed by your company in the past, should they suffer from injury or disease and hold you liable.

Regardless of whether you have a large company with business premises/shop floor or use your home address to conduct your business dealings, should a member of the public enter these premises for a business meeting, they are legally entitled to make a claim against you in the event of an accident. For this reason, it is advisable to purchase public liability protection (this can be mandatory in some business sectors) to ensure you are covered in the event that this happens.

Two more areas you may wish to investigate further are those of; professional indemnity insurance and business car/van cover. The former will provide you with protection against financially crippling and reputation damaging lawsuits instigated by dissatisfied clients. Also covered under this protection scheme, you will usually find; infringement of intellectual property, negligence, dishonesty and loss of valuable company data/documents.

When it comes to running a successful business you can never be too prepared and this is especially the case when it comes to taking out business insurance cover. Ensuring you are covered in all the key areas will help to give you peace of mind and protect your business in the future should you need it.

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