What business insurance do you REALLY need?
When it comes to taking out insurance for your business, whether you’re insuring a contractor or solicitors, it can be confusing. There are so many different types of cover, not to mention all the caveats and specifics of each policy – it’s easy to see how business insurance becomes very complicated, very quickly.
Many business owners are under the impression that they need to take out as many policies as possible to protect their business from every possible threat going. Whilst there is some truth in this, as it’s is important that your business insurance provides comprehensive cover, it’s also important not to over-insure or pay more than you need to. Your business insurance package should only include insurance policies that protect against risks relevant to your business specifically, no more, and no less.
Usually, you are always told how much you need a certain type of insurance policy or cover, but, did you know that there are actually some types that you may not need at all? Read on to find out which cover may not necessarily be applicable to your business, and why.
Employers’ Liability Insurance
Employer’s liability insurance provides protection should any of your staff fall ill or sustain injury due to fulfilling their working duties. It is often considered a standard and mandatory policy to include in your business insurance package if you have staff, but, that is not always the case. There are some businesses that may not be required to have employers’ liability insurance at all.
The following businesses may be exempt:
– Family-run businesses, where all staff are immediate family members.
– Health service bodies, health authorities and primary care trusts.
– Public organizations such as local authorities and government departments.
– Where the only employee also owns half or more of the company.
Of course, you should always make sure to confirm specifics, such as the above, with your insurance provider, and never make any assumptions about the cover that policies provide, or which legal requirements are applicable to your business.
Buildings insurance provides financial assistance in the event that your business buildings or their parts suffer damage or theft. Along with contents, buildings insurance is usually considered a fairly standard policy to include in a business insurance package, even though it’s not legally mandatory. But, there may be some circumstances in which you can still be protected without needing to take the cover out.
This is usually applicable to those who do not actually own their business buildings, but rent them. For example, if a pub/tavern/bar landlord leases his establishment from a brewery, the landlord is responsible for taking out insurance for the business; perhaps policies such as public and product liability, for example. But, there’s a chance that they brewery may already have a buildings insurance policy in place, and so the landlord wouldn’t need to include this in his business insurance package.
This could be applicable to virtually any business that leases their premises, be it a pet shop or a charity. Again, this is a technicality that you should ways be sure to confirm with your insurance supplier, as well as your landlord, as you don’t want to risk leaving your business unprotected in case disaster should strike.
Public liability insurance
Public liability insurance, although not legally mandatory, is very commonly included policy in a business insurance package. It covers you if a member of the public should sustain injury, or their property be damaged, due to your business. However, in a situation where you and your business never come into direct contact with the public, you may not need to take out public liability insurance.
Those who run their business entirely from their homes, also known as homeworkers, may not be threatened by the risks covered by public liability insurance. As an example, consider a business owner who runs an online shop. As they do not provide a professional service, as such, there is no need for clients to visit their home, thus removing the threat of a member of the public being injured on the business’s premises. As well as this, if all business stock is kept at home, i.e. rather than in a warehouse, then the public has no real way of coming into contact with the business, virtually eliminating the risk of injury to a member of the public, or damage to their property. For this reason, the business owner may choose not to include a public liability policy in their insurance package.
It’s worth noting here, that because this online shop’s risk of injury to the public is very low, a public liability insurance policy would probably be relatively inexpensive, compared to that of a cafe, for example, as insurers tend to deal in risk when determining policy prices. In the circumstance that public liability would be at very little extra expense in a business insurance package, the business owner may well decide to take out the insurance anyway, just to be on the safe side.
The above described circumstances are very specific, and in all likelihood, may not be applicable to your business. With this in mind, it’s fairly safe to say that it will probably be good practice for your business to have public liability insurance in place.
Insurance for your business
As mentioned before, every business is different, and so will likely require different policies in their insurance package. Always be sure to check with your insurance provider which policies are right for and relevant to your business’s individual business circumstances. When taking out insurance for your business, you aim should be to achieve a balance of protection and price: get the cover that you need and ensure your business is not left exposed, but at the same time, be mindful of over-insuring and paying more than you need to.