Are you a new business owner in need of learning more about insurance? Remember, taking out the right insurance policies for your business is one of the most important steps in starting any new company. Learning more about insurance is especially important for small business owners too. So think about the work that you do – and the risks associated with them. There’s plenty of small business insurance policies out there, you’ve just to know exactly what you’re looking for.
Let’s run through the very basics of business insurance. Here’s what you need to know.
What is Business Insurance?
In a nutshell, Insurance for businesses will cover your company or brand for any potential losses you might face, whilst running your business for the paying public. It’s all about protecting yourself and the company you’ve worked so hard for. Business insurance is essentially an umbrella term used for the various types of insurances that businesses must take out – the two main types of Insurance for business are ‘employers’ liability insurance’ and ‘public liability insurance’. However, there are others you should know about too.
What Types of Business Insurance is There?
So, what are the main types of Insurance for businesses that pretty much every business should look into? Let’s take a look.
1. Employers Liability Insurance
Employers liability insurance is a mandatory insurance that every business should take out, if they have employees – even if it’s just one employee, or even temps.
It protects you against claims made by employees who suffer from a work-related illness or injury, while on the job. And it covers the costs of claims made against you, including all sorts of court fees and lost wages.
2. Public Liability Insurance
Public liability insurance protects you against claims made by members of the public who are involved in an incident related to your business. For example, they might slip and fall on your shop floor, or you might accidentally break their window when delivering a new sofa to their address. Usually this insurance will cover the costs of legal fees in the claim made against you.
3. Product Liability Insurance
Product liability insurance protects you from claims made against the products you sell. For example, a customer might be injured from a faulty product you sold them. Usually, it will cover the costs of legal fees and compensation if a customer becomes ill or suffers an injury because of a product you designed and supplied.
4. Business Interruption Insurance
Business interruption insurance protects you from a loss of income during periods of time when your business operations cannot continue, due to an unforeseen event or unexpected reason. For example, your shop might have to close due to flood damages. This insurance is basically a way of keeping your finances running and your business afloat.
5. Business Contents Insurance
Business contents insurance protects the physical contents of your business – for example, your equipment, machinery, computers, or even the products and stock that you sell. Usually this insurance will cover the costs of repairing or replacing your business content if it’s lost, stolen, or damaged.
6. Professional Indemnity Insurance
Professional indemnity insurance protects your reputation from damage caused by negligent services. It’s basically a way of protecting your brand from customers, clients, or other third parties who were unsatisfied with your products or services. This is especially important insurance for companies that offer advice, knowledge, or expertise.
What Types of Insurance are Mandatory?
The legally-required Insurance for businesses is employers’ liability insurance. It’s against the law to employ any member of staff if you don’t take an employers’ liability insurance policy – even if they’re only hired on a casual, part-time basis.
Certain sectors and industries also require you to have specific insurances to practice too. For example, financial consultants, accounts, or private healthcare professionals will generally need professional indemnity insurance, because their services revolve around offering advice. Their reputation as skilled and knowledgeable experts is at stake.
Should You Buy an Insurance Package?
The vast majority of insurance providers can offer businesses insurance packages – a combination insurance policy that provides you with several different coverages.
Getting an insurance package is a particularly good option for small businesses or start-ups. They’re usually a cheaper, more convenient option due to discounted premiums of purchasing multiple coverages in one go.
What If You Work From Home?
The world of business has been transformed in the last few years – working from home has now become the norm. So do you need Insurance for Businesses when you’re a remote business owner?
Well, every business is different – but the same requirements apply whether you work from home or run an external office. A home-based business will still face the same challenges and risks.
So, what now?
Before clicking purchase on the first insurance policy you find, it’s important you take a step back and work out what insurance you truly need. Assess all the risks associated with your business operations to cover your back.
Always opt for maximum protection. Never just assume nothing bad will happen to your business anyway. It’s better to be safe than sorry.
Also read: 5 Importance of Insurance in Your Daily Life