The right insurance is essential when you’re running a business, and particularly so if you’re legally required to have certain cover. The type of insurance that you need, however, will vary depending on the business you run and how much risk you’re willing to bear.
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Legal Requirements
Employer’s Liability Insurance Cover. If you are big enough to employ others, then you have to have insurance to protect both you and them. It has to be worth at least £5 million for most businesses.
Motor Insurance. Your business has to have motor insurance if you use vehicles for business purposes, deliveries, for example.
Professional Indemnity Insurance. If you offer advice or consultation, then professional indemnity insurance will mean that you are protected against the possibility that your advice will cause your client to lose out financially. Awards for damages can be high, so you need to consider whether your business is at risk.
Finding an Insurance Adviser
There are two main types of advisers, an insurance broker and an independent financial adviser.
Insurance Broker. They represent a range of different insurance companies, and will be paid through commission. This means that they will help you compare a variety of insurance policies, as they have a good knowledge of the market, but it is likely that they will steer you towards a company from which they’ll get commission.
Independent Financial Advisers. They operate much in the same way as brokers, but they are often smaller companies. You usually pay a fee.
Honesty is really important when dealing with insurers. Withholding information or providing false information can invalidate your claim, meaning that you won’t get the money you need.
Insuring Your Business Premises
Taking out insurance for your premises, whether it’s a shop or a café, needs to cover you for damage from a variety of causes, including
- fire and lightning
- malicious damage
- storms
- floods
- explosion
Contents Insurance
Premises insurance only covers the physical building, so you need contents insurance to protect everything inside, i.e. stock or machinery. Business interruption insurance will protect you from loss of profit and similar events.
You may need specialist insurance for your particular type of business. One Sure Insurance for example, offers all sorts of insurance, ranging from tattoo parlours to pet shops.
Your Employees
You should already have employer’s indemnity insurance, but you may want to consider offering health or life insurance as a benefit for your employees. It could be a major attraction for any potential employees.
I think that it’s really amazing when a company is fully insured and offers insurance to its employees. That way not only is their business covered, but also the employees that work for them.