Business insurance covers your firm against possible risks, such as the financial risk of theft or loss of stock, damage to your tools or equipment, or to a third party’s property, complaints of poor workmanship or poor advice, and injury to another person. Insurance can also cover legal costs and compensation successfully awarded against your business.
Small businesses are most likely to be at risk, unable to afford onerous compensation claims, or to pay for damage without having business insurance. Accidents happen all the time. Whether your business is large or small, online or physical, business insurance can protect you.
It is also worth noting that some clients may require you to have business insurance cover before agreeing to contracts. This is also true of some trade organisations who may require professional indemnity insurance.
Working out what business insurance you need may feel daunting with so many options available but using a business insurance comparison site to compare business insurance will simplify the process. Explained below are the types of business insurance available as well as factors that can affect the cost of your policy.
A combined business policy can cover a range of risks but the cost of the insurance will be determined by your liability cover. There are three key types of insurance:
Employers’ liability insurance: covers claims for compensation and legal costs should a previous or current employee become sick or injured due to a work-related activity. Even if you only have one member of staff, employers’ liability insurance is a legal requirement.
Public Liability insurance: covers your business should a member of the public be injured or their property become damaged because of your business activity.
Professional Indemnity insurance: covers the cost of possible legal action, should you provide professional advice and expertise to other businesses or clients and they claim for financial losses due to work you carried out for them.
A business insurance comparison site will help you find the right cover but it’s worth running through the risks to which your company might be exposed before making a decision.
The right insurance for you will depend on the size of your business – are you a sole trader or limited company? It will depend on the type of work you do, whether you have employees, have exposure to the public or give professional advice which could lead to a financial loss for a client. You may find a combined policy is best, or separate liability covers plus any extra protection you might feel is necessary.
From a legal perspective it is only necessary to have employers’ liability insurance to function as a business if you have one or more employee. This includes volunteers, temporary staff, contractors and apprentices. If you operate as a sole trader, you can legally function without it.
Some clients may ask to see evidence that you hold certain types of insurance, such as public liability insurance, prior to engaging in work with you. Professional regulatory bodies may also need professional indemnity insurance.
It is still recommended that you have business insurance; obtaining the best cover for you will protect your business, employees, clients and members of the public from loss, damage or injury. If the worse case scenario did happen, it could lead to your business having to cease trading due to excessive costs.
Running a business is time-consuming and determining what insurance you need can be complicated. Websites such as Bright Compare which compare business insurance across a wide range of insurance companies can simplify the process. Business comparison websites show a range of insurance quotes using your details, such as the type of business you run, its history, the size of your company, number of employees plus levels of cover you might need, together with equipment and stock that would need to be covered. Insurers will also want to know whether you have made claims before, to determine whether you are likely to claim on your insurance.
The results will be listed by price and allow you to compare business insurance, based on the level of cover you require.
The cost of your insurance is likely to be as unique as your business and there are a variety of factors that can affect the amount you end up paying. If you have made previous claims, particularly in the last five years, this could potentially increase the cost. How many years your business has been operating and whether you work in dangerous environments or with dangerous materials will also be factors underwriters will consider. Also, by adding more cover, this will clearly increase the price, as will the value of the goods, tools or equipment you need to cover.
A CCJ or IVA may also affect purchasing insurance; it’s not necessarily a bar to buying insurance but may affect the cost.
You can pay for your policy either annually or spread the cost over monthly payments, depending on what works best for your business’ cash flow.
Every small business is legally required to have employer’s liability insurance. Employers liability insurance covers your business in the event that one of your employees claims they’ve suffered an illness or injury at work as a result of working for you.
Employer liability insurance is required by law if you are a small business. It protects your business in the event that a member of staff claims they’ve suffered an illness or injury at work as a result of working for your company.
Business insurance is really important to give you peace of mind to know you are covered in case any unexpected events happened which could cause a lot of finally stress on you and your business. Business insurance can take that financial worry and burden away from you.