What kinds of business need commercial insurance?

Building a business is a bit like raising a child: you nurture it through the delicate early stages, then all of a sudden the company finds its feet and the risks start multiplying. Scaling up is hugely exciting, but as the pace of trade quickens, it’s easy to feel a bit lost and uncertain about your risk profile.

There’s a simple answer to these worries: commercial insurance. This is a type of cover that protects businesses from a range of threats, from damage to property to personal injury to employees.

The basics: public liability and employer’s liability
The detail of a policy will vary depending on your individual business circumstances, but almost all policies cover public liability and employer’s liability. These forms of cover are usually required by law.

Public liability insurance provides cover in case someone is injured or their property is damaged on your premises. Even if your workplace is not open to visitors regularly, it’s still wise to consider this type of insurance. Even if it’s only a courier slipping on some loose carpeting, you could still be held liable.

Employer’s liability insurance covers you for injury to employees in the course of their work. This can include unpaid volunteers, part-time or temporary workers and subcontractors.

Can I get by with the bare minimum?
When you’re starting out building a business, it’s understandable that you would want to keep your overheads, such as insurance premiums, as low as possible. However, it can be a false economy to stick with just employer’s liability and public liability insurance if this doesn’t cover your risk profile.

Depending on the unique characteristics of your business, you’ll probably need some other types of insurance as well. Insurance can be the life jacket that keeps your business afloat if a problem occurs. Let’s consider some of the other insurance policies you might want to consider.

Professional indemnity insurance
No matter how good you are at your business, it’s possible to make mistakes. Professional indemnity insurance provides cover against claims brought against you on the basis that you didn’t complete work properly or gave incorrect advice.

Even if you’re confident that you’ve done the right thing by a client, defending a claim can be costly. This type of insurance provides cover for compensation and legal costs if a claim is brought against you.

Business buildings insurance
If you have business premises, for example an office, shop, or restaurant, you’ll need to have cover to guard against risks to the building. This could be anything from a car crashing into your front wall to the roof blowing off in high winds.

Business contents insurance
As recent floods have demonstrated, it doesn’t take long for a business premises to be wiped out, whether this is from water, fire, burglary or any other reason. It can cost thousands of pounds to fit out an office – more if you include electronic equipment or specialist devices. Having insurance will help protect you from these losses.

If your business uses a lot of specialist equipment, there might be a specialist policy which would suit you. For example, insurers often offer IT equipment cover, plant and machinery or tools and equipment insurance. These types of cover reflect the unique value and characteristics of your company.

Product Liability Insurance
If your business makes something, you’ll almost certainly need product liability insurance. This provides protection if your products have a flaw which causes loss or damage to a customer or third party, for example through contamination or faulty components.

Business interruption insurance
It’s a sad truth that most small businesses don’t make it – when times get tough, they don’t have enough resource to weather the storm. Business interruption insurance is there to help you through. Cover for damage due to fire or flood usually only covers damage to property, for example, leaving you to cope with an abrupt loss of financial income for months or even years. This type of insurance helps to bridge the gap.

How are you protecting your business as it grows and develops? Are you confident that you’re not being exposed to significant risks? To check if your business is fully covered or for more information on your insurance needs, call R Collins & Co on 01977 558391.