Business Insurance

Business insurance is a necessity for every company, protecting against natural disasters, manmade disasters and lawsuits. Insurance brokers can determine the type of insurance necessary to protect all aspects of the business from the building to the product or service. Insurance brokers can also find the best deals available to keep a company’s expenses low.

Types of Cover Available

Public Liability

Public liability insurance covers claims from individuals who are not employees of your company, but may be on the premises. This insurance also covers damage to their property as well as injuries sustained through trips, slips and falls..

Employers’ Liability

Employers’ liability insurance is required for businesses with one or more employees. This insurance covers claims that may arise if an employee becomes ill, injured or dies while on the job. In the UK, the policy should cover at least five million pounds if the company has employees. The protection is valid both within the workplace and outside the workplace. Employers’ liability insurance should cover the cost of legal fees, damages and compensation.

Professional Indemnity

This type of cover covers any claims from clients who suffer from your company’s negligence or bad advice. Most companies offer up to two million pounds in cover. Many companies need to change cover depending upon the types of projects secured by the business. Business owners should find a company that allows this type of flexibility.

Professional indemnity will also protect against an unintentional infringement of broadcasting rights, trademarks or copyrights. If a business unintentionally attempts to pass off a product or service as its own, professional indemnity insurance will cover it.

Professional Data Loss or Document Loss. Professional indemnity insurance covers missing, destroyed or damaged client documents or data. Insurance covers all data or documents while the items are in the possession of your business.

Dishonesty. If an employee, freelancer or director is guilty of theft from a client while under your business’s direction, professional indemnity insurance will cover losses from the theft.

Defamation. If any material is produced that may cause offence to another party or client, and the company is held liable, professional indemnity insurance will cover any related legal expenses and any damages incurred.

If a claim arises against the business and requires compensation, the insurance company should be contacted immediately. Immediate action could minimise the need for legal intervention. If a client withholds payment after a complaint, business insurance companies can pursue it on your behalf. If a business owner cannot correct a problem easiliy, business insurance companies can address this problem. Legal representation can also be obtained if a series of complaints are received on a project.

Combined Commercial Policies

This policy is typically recommended for commercial, warehousing or industrial trades. Many business owners combine two types of business insurance in one commercial combined insurance policy. For instance, a company may combine property damage insurance with public liability cover. Any other sections may also be added. Business owners should speak with independent brokers to determine the type of coverage available.

What to Consider When Selecting Insurance Cover for your Company

Size of the Client or the Contract. Insurance brokers will determine the cost of insurance based upon the size of the client or the contract. Simply convey this information to the insurance broker and a quote will be generated based upon this information.

Any Costs of Defence if Required. If a company is sued, a business owner should estimate the approximate costs of any defence. The cost of the insurance will depend upon the amount of defence required for any particular instance.

The Maximum Settlement that Could Potentially be Awarded Against a Company. Business owners should estimate the maximum settlement that could be awarded against a company. Based upon this estimate, an insurance agent can quote a price to a company requiring insurance.

Types of Trade Covered

Business insurance can cover almost all industries. Some exampless include: Restaurants, shops, cafes, offices, sandwich bars, salons, pubs, hotels or surgeries. Accountants, business and management consultants, engineers, home inspectors, letting agents, marketers and IT consultants also require business insurance. People in these industries will require professional indemnity insurance. Other insurance types may be combined to protect other aspects of the business.

Most businesses start off with the basics. Basic insurance will include: Employers, products and services liability. Most companies also add cover for stock, legal expenses, computers, contents and buildings. These policies are competitively priced. Business owners can typically obtain a relatively inexpensive policy if proper research is conducted.

Understanding PLI

PLI is generally considered an essential cover needed by the majority small and large businesses. While there are many types of business policies offering varying complexity, cover for public liability, although not required by law, is highly recommended when your business premises are open to the public.

The law requires a similar type of cover, known as employer’s liability insurance, for businesses that have employees. In many cases, you can purchase you public liability cover bundled together with an employer’s liability policy.

Do I need PLI?

Here are some questions that you can ask yourself to determine whether you should take out a premium for your business.

  • Is your business a storefront or otherwise open to public visitors? If someone comes into your store, restaurant or office and slips on a wet floor or gets sick after eating the food, you could be liable for damages due to negligence on your part.
  • Even for businesses that do not have regular visitors, you may still benefit from cover. For example, if you work regularly on other people’s property, you could be liable for damages while on the job. For example, if you drop some tools on a client’s computer monitor while working on a ladder you could be held liable for damages.
  • Do you have employees that work with the public? You could be liable for any of their actions while on the job that causes harm to members of the public.
  • Do your clients have requirements that their contractors and suppliers have PLI cover?

What does it cover?

Public liability will pay for claims resulting from negligence on the part of your business that causes damage to members of the public. The insurance covers actions by employees and it can also protect against damage caused by products you offer.

Depending on the specific policy, the plan can cover:

  • Legal fees and costs
  • Hospital treatment that the NHS claims from you
  • Other damage-related costs.

What does it cost?

The premiums can vary depending on the type of business and the level of business activity. For example, businesses that pose higher risk to the public will need to pay higher premiums. Business with high turnover will generally pay higher rates, for example, a store with large amounts of foot traffic will pay more than one with less traffic with everything else being equal. Brokers can offer discounted rates in order to beat out the competition, so it pays to shop around compare prices.

The cost of insurance also depends on the amount of cover that you choose to protect your business. Generally, the minimum amount of cover available for businesses is £1 million. If your company bids for government contracts, there may be a requirement for cover ranging from £5 million to £10 million.

Comparing different policies

When comparing public liability insurance plans offered by different providers, make sure to read the fine print so you know exactly what you are getting for the price. The policy details can vary widely, so do not assume that they all cover the same things.

Here are some important items to look out for when reading the policy:

  • Cover limits – Each policy provides a certain amount of of cover in cases of a claim. Make sure that cover limits are adequate for your needs.
  • Exclusions and exceptions – Look over these carefully or else you could get a rude surprise if you need to make a claim. For example, does the policy cover employees who work on ladders or who deliver products by car? Often cheaper policies look great in terms of cover limits, but they are full of exclusions to the liabilities covered. Common types of exclusions pertain to working with radioactive materials and asbestos, and damage caused by terrorism or war.
  • Excess – Policies will require that you pay excess before they award any money for a claim. The purpose of the excess is to prevent clients from making too many small claims. In some cases, you can lower premiums by taking on additional excess.

The company you keep

In addition to examining the policy terms and conditions, it is also a good idea to check on the company to ensure that it is reputable and reliable. You will want to avoid providers that hassle customers when they make a claim. Company ratings and reviews can help consumers in researching insurers. Some large financial firms provide ratings of these providers that give consumers an idea of their financial strength. This information is important particularly in times of economic downturn.
You can also find reviews and ratings that give you an idea of the type of customer service that the company provides, i.e., are they courteous and helpful during the claims process.