Is your business adequately insured?

According to a recent study, over three quarters of small and medium-sized businesses in the UK would struggle if they lost a key member to illness, long-term incapacity or death. Statistics from the report revealed that fewer than a fifth of firms had adequate insurance in place to protect against the loss of a key person.

By law, businesses are required to have certain types of insurance policies in place, but it is advisable to consider additional forms of insurance such as key person insurance, in order to protect your business from a situation that could lose you considerable amounts of money, or even threaten the closure of your business.

Compulsory Insurance

Employers’ liability insurance covers you for injury or illness that may affect your employees, as a result of work carried out under your employment. The cover must be for a minimum of £5 million, but you should look closely at your risks and liabilities, because it may be worth taking out cover for more than this amount.

Motor vehicle insurance is required for every vehicle that is used on the road or in another public place. This includes, of course, vehicles used in connection with your business. You are also responsible for ensuring that employees who use their own vehicles for work have sufficient levels of insurance. Make sure you check that your policy covers your vehicle for business use, before committing to it.

Industry-related insurance -Some professionals are required to take out professional indemnity insurance (PII) which protects you against clients claiming a loss as a result of your non-performance, or professional negligence during the provision of your services. This type of insurance is therefore often compulsory for specific businesses working in service, although it is good business sense to consider taking out this insurance if you provide a service of any kind.

Additional Insurance

Although not compulsory, additional insurance is often vital in order to protect your business in the event of an incident.

Some other types of insurance policies that protect businesses are:

Public liability insurance covers claims for damages sustained to members of the public or other businesses or property owned by them. The minimum amount of cover a business can take out for public liability insurance is £1 million, but you may be advised to take out up to £10 million in cover, depending on the business.

Product liability insurance protects against damage or injury caused by a failure of a product that you have manufactured or sold with your branding on.

Commercial property, or building and contents insurance offers protection of your business equipment and property in the event of fire, flood, theft or other disaster.

Business continuity or business interruption insurance protects against the cost and loss of profits incurred in the event of a disaster such as a flood.

Key person insurance compensates your business in the event of the illness or death of a key member of staff.

Goods in transit insurance offers protection for goods that may be lost or damaged whilst in transit.

Top Insurance Tips

A surprising number of businesses do not have appropriate insurance policies, which means they are not sufficiently covered or are paying higher premiums than is necessary.

Our top tips can help to ensure that you have the right kind of cover.

• Read the small print – make sure you understand what the policy is covering you for as well as any excesses, exclusions or restrictions that may apply.
• Shopping around for the best deal means you could save a substantial amount on your premiums. Companies sometimes offer discounts for multiple policies, so consider looking into this as well.
• Regularly review your existing policies to make sure they are kept up-to-date and are still relevant to the changing needs of your business.
• Conducting a risk assessment and taking steps to reduce the amount of risk your business faces could reduce the premium you end up paying.
• Make sure you have adequate personal insurance in the event of your own incapacity, death or loss of asset