All businesses require suitable insurance protection, no matter how big or small they are. When you are starting a new business or assessing the outgoings of your business, it may feel like a waste of money to pay out for insurance when you don’t think you’ll need it. But insurance claims happen, and while you don’t require cover right now, you could require protection at any point in the future without any notice.
Even if your business is covered by insurance, it's worth regularly checking that you are adequately covered for everything you need from your policy. Many business owners believe their insurance policies cover everything, but this isn’t always the case.
The only mandatory insurance required for a business in the UK is employers’ liability insurance, which covers you should a staff member claim they have suffered illness or injury through their work. This is a legal requirement and can result in a fine should you not be protected. However, this alone is not enough cover for many businesses.
With adequate cover, you should also have other aspects of insurance on your policy. Additional cover may include public liability insurance to protect against claims made by the public concerning your business or professional indemnity insurance for companies that offer a service, as this can protect you should you make a mistake or a client suffers financially as a result of your work.
Of course, you want to ensure that your business liability insurance covers any property and its contents adequately too.
Some critical questions should be considered when checking that your policy protects you and your business assets appropriately. We’ve outlined just some of these below.
One of the most important questions to ask of your business insurance cover is if it would allow you to fully rebuild your business should the worst happen. If your building is caught up in flash floods, storm damage or an arson attack, you may have to rebuild from the ground up. You will need to ask yourself if this will be possible from the amount of cover your policy gives you.
It’s a good idea to carry out an audit of your assets, including what stock and equipment you have that would need to be replaced. You should also have an assessment of your property to understand its value. Professional services are available to assess rebuild costs to know how much the property's rebuild would cost as well.
When the worst happens, you will have a lot to worry about. You won’t want to think about how your business can remain operational and come out of the other side of a claim. Try and consider now how orders can be met or how services can continue should your physical building not be available to you. If this cannot happen, you want to ensure that your cover includes business interruption protection. This would mean that in the event of something happening to your physical space, you can continue to pay any rent, salaries, expenses or loans until you can get up and running again.
While many people think about the physical damage that can occur to property from natural disasters, fire or theft, other issues need to be covered. Unfortunately, many businesses can come up against lawsuits from staff, clients, customers, and or members of the public.
It's essential to consider the impact that a case could have on your business and ensure you are protected from lawsuits in addition to your business’ assets. This type of cover is essential for a medical or a service-driven business. Policies such as our care home insurance or office insurance packages include medical malpractice or professional indemnity insurance to help protect from lawsuits.
Should your business find itself in a situation where there is not enough cover to protect against damage, lawsuits or other issues, then the liability can start to fall to the business owner. Without adequate cover, you could find yourself being responsible for covering the cost of repairs, stock, equipment or legal fees.
If you are uninsured for a specific problem that arises, the loss could be taken from business profits, or you, as the owner, may find yourself legally liable to pay for the loss yourself. This is also the case should you choose not to adequately protect your business.