Insurance 16 July 2018

Choosing the right type of business insurance for your small company

business insurance
With the correct level of business insurance in place, you can ensure that your small company survives through any hardship.

Doug Kelly, director of Bluedrop Business insurance, guides micro company owners through each type of business insurance to help you choose the most suitable options your firm.

Finding the right level of business insurance can be vital in enabling full protection against unforeseen circumstances, covering costs that would be otherwise potentially crippling to a business. From possible compensation and legal fees to recovery of buildings and contents.

Business insurance is one of the most effective ways to maintain a stable, safe workplace and income stream. Any form of unanticipated crisis can threaten your business at any time and in some cases even leave your business with no option other than to cease trading until you are back up and running.

In fact, as many as 40% of businesses are unable to re-open as a result of underinsurance and miscalculated business interruption insurance.

With the correct level of business insurance in place, you can ensure that your small company survives through any hardship. You and your employees have invested considerable time, energy and commitment into your business, which is why you need cover that is flexible and can be tailored to your individual needs giving you peace of mind quickly and stress-free.

What type of business insurance do you need?

The types of business insurance cover that you need will depend upon your business focus. Perhaps you employ staff, or there is a chance a member of public could be injured as a result of your products or have an accident onsite. You may have buildings, contents, equipment or stock to consider, or perhaps your business gives advice or a professional service that customers rely on.

Whether you are a sole trader, self-employed or running a small or large business there will be many different aspects to consider. Here are some examples of the more popular forms of business insurance.

  1. Commercial insurance

As a commercial business, there are some legal requirements in terms of insurances, and other non-mandatory business insurance options that may be recommended to protect your company depending on the type of business that you run.

  1. Business buildings insurance

If you have business premises then an insurance policy will be required to protect against risks such are fire, storm damage, flooding and escape of water. If you are a tenant and rent your premises then the landlord will be responsible for insuring the building, unless the business has a shop front.

  1. Business contents insurance

If your business relies on expensive contents such as equipment or stock, then you will also need a business contents insurance policy.

When business assets such as office furniture, laptops, machinery, kitchen equipment, or print presses for example, aren’t insured then you can risk the ability to continue trading should these items not be insured.

  1. Business interruption insurance

Business interruption is an additional item of business insurance to consider which covers any loss of income during the period it takes you to get your business back up and running following disaster.

Without this cover many businesses find they are unable to re-open following incidents of business interruption as loss of revenue can be crippling to business.

  1. Cyber insurance

With more and more businesses, even those smaller ones, being attacked by cyber-crime protecting your business from cyber risk has become a necessity. Data breaches and attacks can be mitigated with protection to cover business losses, expenses, legal fees, and reputation protection.

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  1. Liability insurances

Businesses have many liabilities and responsibilities and need to protect against the possibility of costly and time-consuming litigation. Most businesses need some level of liability insurance demonstrating that you are a respectable business who takes health and safety and responsibility seriously.

  1. Employer’s liability insurance or worker’s compensation insurance

Employer’s Liability Insurance is a legal requirement in the UK for those businesses that employ staff. This form of business insurance protects against employees being injured or falling ill at work or because of work. In the US, this is known as Worker’s Compensation Insurance.

  1. Public liability insurance

If your business encounters members of the public, then this insurance is needed to protect against compensation claims for injury or damage. Some client contracts may even require a specific level of public liability insurance.

  1. Directors and officers liability insurance

D&O Insurance protects you from being sued or suffering losses from acts of negligence by an employee. It offers financial support and defence against potential investigations into the behaviour of executives and the way the business is managed.

  1. Professional indemnity insurance

If your business offers a professional service or gives advice to other businesses, then you may need this from of business insurance. Some clients may require that you have this form of insurance before doing business with you, professions such as business consultants, accountants, architects, IT professionals, real estate and medical professionals are commonly affected.

  1. Motor fleet insurance

Motor Insurance is also a legal requirement and Business Fleets are no exception. If your business operates a fleet of vehicles from as little as three to 500+ you can get motor fleet insurance all under one policy at a cheaper rate and with more convenience.

Even if you operate a grey fleet, where employees use their own vehicles for business use, you will need business insurance to cover you for this.

Doug Kelley is director of Bluedrop Services

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