Business insurance is a discipline that has been around for long and has therefore undergone some serious reforms, challenges and criticisms. This is why we need to refresh our knowledge with articles on the basics of business insurance once in a while.
One of the fundamentals of integrated risk management is to transfer the risk to a third-party. Taking up a business insurance policy is a medieval, tested and trusted means of transferring business risk.
But before you jump out to source for a business insurance policy, spend a bit more time reading this guest post by an insurance expert friend of mine who work for Mastercover. Though they specialise in car covers, the basics of insurance tips given applies to every kind of business.
Get to grips with the of business insurance basics
It doesn’t matter how successful your company is, you could find yourself in deep trouble if you fail to get to grips with the business insurance basics. With this in mind, here’s a brief guide to the different forms of cover on offer. I recently made a post on the importance of small business insurance and that has led to other questions like what are the basics of business insurance?
First and foremost, note that as soon as you become an employer, you have to get employers’ liability cover. As insurance specialists Mastercover point out, if you have one or more worker, it is a legal requirement to have one of these policies in place. Bear in mind that for each day you lack this insurance, you risk being fined up to £2,500. Meanwhile, the minimum level of cover is £5 million and you must get your policy from an authorised insurer.
Employers’ liability protection covers the cost of compensation and legal fees in the event that you’re held to be responsible for injuries or illnesses that affect your workers. The insurance should cover full and part-time personnel, any self-employed contractors who you hire, temporary staff, apprentices and volunteers.
You must also be aware of public liability cover. Unlike employers’ liability, this insurance is not required by law. However, depending on the type of business you run and the sector you operate in, you might find that this cover is a requirement. These policies protect you and your business from the cost of claims made by members of the public for incidents that occur in relation to the activities of your firm. It can cover the cost of compensation in claims involving personal injuries, death and loss of or damage to property.
You should consider public liability cover if you own a business premises that members of public or customers visit, you organise off-site events or activities that members of the public attend or you run a company from home and people visit your property for professional purposes. Also, if you work in the public sector, you might be required to prove that your business is covered for at least £5 million.
Other important forms of cover
Depending on the type of work you do, you might benefit from taking out professional indemnity cover too, accounting firms for example. This can protect you from claims made against you or your staff members for negligent advice given to your clients. It can cover a range of claims, including negligence or breach of duty of care, intentional dishonesty by your workers and infringement of intellectual property rights.
Meanwhile, if your business uses vehicles, you’re legally required to have suitable commercial motor insurance. Commercial property protection can be important too. This covers the cost of rebuilding or repairing your premises or replacing your stock or equipment.
Of course, this isn’t an exhaustive list of forms of business insurance available, but it does cover the most important policies. As always, I need to draw your attention to a very important insurance ethos- never try to defraud an insurance company because posterity will always catch up with you.