A guide to getting the right insurance

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Guide to small business insurance

Getting started in business can be exciting but can also really hard work. There are all kinds of new expenses to deal with, from the rent on your premises and business rates – not to mention dealing with the taxman and PAYE, VAT and national insurance.

With so many outgoings even before you start to turn a profit, scrimping and saving on the things that don’t have an impact on your daily takings or monthly income can be tempting. But for some things like your business insurance, you need to carefully consider whether you can afford to be without.

Getting the right insurance in place, with the right level of cover could protect you against potentially huge legal expenses if you are sued by a customer, employee or even member of the public.

This short guide talks you through the three main kinds of insurance your business may need.

1. Public liability insurance

This type of business insurance could protect you against claims made by members of the public and third-parties. These claims could relate to personal injury – for example someone hurts themselves by walking into a display stand in your shop, or someone trips over a cable while you are working on a client’s property, or they could relate to property damage.

These kinds of claims are for accidents and incidents that you can’t really plan for, even though you may make every effort to follow health and safety guidance or make your property as accessible and safe as possible.

Even small issues and problems may result in hefty legal bills and large demands for compensation which as a small business you may not be in a position to afford. Public liability insurance is not compulsory by law for most businesses, however some business owners may consider it essential in order to work with certain contractors or they simply want peace of mind should they ever face a claim.

Making an informed decision on the right level of cover for your business could help cover the cost of a successful claim made against you.

You can find out more about public liability insurance from constructaquote.com here.

2. Employer’s liability insurance

Employers’ liability insurance could financially cover you for legal expenses and compensation claims made by your employees for injuries, illness and property damage that occurs as a direct result of their employment with you.

Unlike other kinds of business insurance, employers’ liability insurance is a legal requirement if you employ staff or have people working on your behalf (even if they are volunteers or on work experience).

The law on employers liability insurance is clear and there a very few exceptions whereby you may not be legally obliged to have cover in place – one being, if your business is unincorporated and you only employ close family members: check out this employers liability insurance guide for more information on this.

If you have employees and do not have the appropriate cover in place you could be fined up to £2,500 for every day you are not properly insured.

You can find out more about employer’s liability insurance from constructaquote.com here.

3. Professional indemnity insurance

If you offer advice or a professional service then you may wish to consider taking out professional indemnity insurance. Again, this kind of insurance protects you against legal action but in this case it protects you from claims from your customers or clients who suffer a financial loss as a result of your work or the service you provided.

These claims could relate to negligence – for example leaving confidential business papers on the bus, or even designing blueprints for a structure which are later found to be incorrect causing a delay and loss of earnings during building.

Some professional bodies make professional indemnity insurance essential as part of their membership or official admission. However, even if you do not require professional indemnity insurance for membership purposes, it could also be necessary for contracts you wish to pursue within the pubic sector.

You can find out more about professional indemnity insurance from constructaquote.com here.

To find out more about business insurance speak to one of our specialist advisers today. Call: 0808168 68 68

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