As a small business owner, the world of business insurance may seem like a complex, technical realm. However businesses need protection against a vast number of objects – stock, business assets, employees and a ream of others – so it’s worth investing the time to research what types of insurance are useful or even compulsory.
Here’s a quick guide to three of the foremost types of business insurance that small business owners need to consider before their company gets off the ground.
Public liability insurance
Liability insurance is essential for nearly all forms of businesses including sole traders, partnerships, charities, not-for-profit organisations and many more. Public liability insurance is important for businesses because the cover pays out in the event a mistake is made which causes an injury to a member of the public or a mistake which damages their property.
So, if a customer trips over and injures themselves while in your store, public liability insurance will cover the cost of any compensation that may need to be paid. Roofers will need public liability insurance just in case any tile work causes damage to a client’s property; insurance will cover the cost of further repairs. Similarly, plumbers will need public liability insurance just in case any repairs cause further water damage to a client’s property.
Clearly, acquiring a policy that covers your public liability for all aspects of your business should be a top priority.
Directors and Officers Insurance
It is not just the owner of a small business that needs to think about insurance. Directors of limited companies and plcs can also face claims for their actions and should be insured as such.
It’s a little different to standard liability insurance as an increasing number of claims are made not only against the business but also against individuals in their own name. As these people can’t rely on the business policy to pay out on a personal claim, it can lead to huge losses for all involved.
This type of insurance covers claims made by regulators such as the Health and Safety Executive or the Office of Fair Trading. It can also cover any claims lodged by creditors against individuals. Not only that, it can also cover claims brought in relation to breach of European legislation and insolvency.
If your company has directors or key managers, directors and officers insurance is a must. However it is cover that is not underwritten by all commercial insurers – it might be worth going through a broker which can search for the right deal for you.
You only have to see the misery that recent flooding has caused to thousands of residents across the UK to know that flood insurance is vital. Furthermore areas that aren’t normally at risk to flooding have been crippled by the persistent wet weather so even if the area is not high-risk, it’s certainly worth keeping this form of cover at the back of your mind.
Flood insurance safeguards your company’s most valuable assets against the risk of flooding. Most policies tend to cover the cost of drying out, repairing and restoring your property and its fixtures and fittings. It can also cover the cost of removing debris as well as any fees from architects, surveyors and lawyers that may need to be hired as a result of flooding. Your chosen insurer may even recommend certain tradesman and specialists that can help your business return to normal as soon as possible.
While these three types of insurance are important, they won’t cover you against all claims. Small businesses owners should sit down with an expert in the field to work out what other forms of insurance are right for them.