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Small businesses have to ensure that all the right paperwork and licences have been obtained. One of the key requirements is to insure the different aspects of your business. The best way to do this is to carry out a risk analysis of your business processes and assets to determine what your greatest potential insurance needs are.
Below we have provided a guide to the different types of insurance that small businesses should consider.
Employers’ Liability Insurance
Employers’ liability insurance is compulsory as soon as you hire any employees. You can be fined £2,500 per day of non-compliance. This insurance is necessary for covering the costs associated with injuries or illnesses caused by factors in the workplace. It covers temporary staff members, casuals, and volunteers too.
Vehicle Insurance
If you have bought vehicles for your business, you will have to insure them. For example, if you have a cab business, you will need taxi insurance. The latter is generally more expensive than other vehicle insurance for several reasons, such as the constant use of a cab providing more opportunities for it to be involved in an accident. However, there are ways to minimise taxi insurance.
It is important to teach company drivers about road and driving safety as a claim on a vehicle may push up your insurance costs.
Public Liability Insurance
Public liability insurance will provide cover for workers and contractors on your sites. The cover is for damage to their property or physical injury. Although this insurance is not a legal requirement, many contractors refuse to work for an employer who doesn’t have it.
Professional Indemnity Insurance
Professional indemnity insurance is a necessity if you provide advice to clients or perform services for them. These clients may sue your business if they allege that harm has befallen them because of wrong advice or treatment. This insurance will cover you for the legal costs of defending yourself and for compensation payments you are ordered to make.
Business Contents Insurance
As the name implies, business contents insurance insures your property, stock, and assets in the event of loss or damage. Events that are responsible for this are floods, fires, thefts, and any other events that the policy covers. Some incidents, such as damage due to rioting, may be excluded from the cover. Inclusions and exclusions are spelled out in the insurance documents.
Product Liability Insurance
If one of your products causes your customers to experience personal illness and/or injury or damage to property, this insurance type will compensate them and cover your legal fees. Examples could be a food product that goes off and is consumed or a cleaning product that destroys a carpet. Product tampering may also occur.
Personal Accident Insurance
If you are injured or become seriously ill and it affects the running of your operations, you can claim this after being absent for a fortnight or more on this insurance. The cover is for income that you lost, medical bills, and hospital accounts. Payment is provided up to a certain amount so the policy may not cover all your expenses and lost income.
Each business has different needs, and you should choose the types of insurance that cover areas identified in your risk audit first.
