Many types of business insurance are on the market, and they are extremely important for companies to put in place.
Insurance is one of the most important things to consider when starting a business. Many factors affect the type of cover that needs to be considered included but not limited to:
- If your business provides advice or professional services.
- The place or property a business is run from.
- If equipment is required to run the business.
- If a business employs staff for it to run.
Why Do I Need Business Insurance?
Insurance is important for business because of accidents, injuries, mistakes and unforeseen events,
These can occur even with detailed planning, preventative measures and a risk assessment, some are unavoidable.
Insurance can mean the difference between a business going under or a business surviving if a mistake or accident occurs whilst trading.
What Business Insurance is Needed?
The only type of business insurance that is enforceable and mandatory by law is employers’ liability insurance.
However, some trade and regulatory bodies may also require a business have other insurance.
Examples Where Business Insurance is Required
An example of this would be the institute of Chartered Accountants in England and Wales. Here regulatory bodies make it compulsory for practising members of Chartered Accountants to have professional indemnity insurance.
Some types of insurance options that are available and are most prevalent:
- Public liability insurance.
- Employers’ liability insurance.
- Professional indemnity insurance. Can cover any products manufacture or design that has a full that can cause injury or accident.
- Product liability insurance.
- Business contents insurance.
Business Insurance – Do I Need Public Liabilty Insurance?
Public liability insurance is cover in case somebody has an accident or suffers a loss where the business may be at fault.
For example, if a client’s upholstery was ruined by a cleaning business because the wrong product was used on it, PL would cover the costs of the accident.
Do I Need Employers Liability Insurance?
Employers’ liability insurance is a legal requirement in the UK and covers any business that has employees.
Employers’ liability can cover claims made by employees. This includes if the employee has been injured becomes ill or has an accident as a result of working for a business.
Business Insurance – Do I Need Professional Indemnity Insurance?
Professional indemnity insurance is for businesses that give advice or offer a professional service. It covers the business if a mistake is made in work but leads to financial or professional loss for the client.
This can include things like unintentional copyright infringement and libel claims.
Do I Need Product Liability Insurance?
Product liability insurance is insurance for if a design, manufactured item, or product even becomes faulty and as a result. This might cause accidents or injury to the public.
It is important to note that even if a business did not make the product, they may be responsible for any accident or injury it leads to.
Do I need Business Content Insurance?
Business content insurance is insurance that a business has/should have for any equipment that may be on the premises. Therefore, this will cover if the equipment is lost, stolen, or damaged.
This can mean the difference between being able to carry on trading should help the policyholder get back on their feet as soon as possible.
What Is an Example Of Someone Not Having The Correct Business Insurance?
One furniture fitter had to claim on his public liability insurance while working on a new-build house.
A cabinet he had installed fell off the wall and knocked a fellow contractor off a step ladder. This caused injury to the contractor’s wrist and back.
The claim was settled at £25,235, but the furniture fitter only had to pay the excess of his policy, which was £250.
In the US, Leo Welder launched the online start-up guide ChooseWhat.com in 2008.
After purchasing general insurance policies failing to purchase Intellectual property insurance, he ended up embroiled in a trademark lawsuit with J2 Global.
The two parties reached a settlement, and his company survived the entanglement but Welder was out of pocket several hundred thousand dollars paying for his defence fees before they reached the deal.