The world of business insurance can seem daunting when you are bombarded by a plethora of policies. Every penny counts, so it makes sense to be savvy and make sure you’ve got the right cover for you. Inadequate cover can be disastrous, leaving your business open to sky-high legal bills and compensation claims. Here are three essential tips to help you choose the right cover for your business.
1. Legal duties
Business insurance is not a legal requirement unless you employ anyone based in the UK, and then you must have Employers’ liability insurance worth at least £5 million. Failure to have this in place can lead to a fine of up to £2,500 a day for each day of insufficient cover. A copy of the insurance certificate also needs to be on display for all staff to read.
Having this cover also makes sense from the employer’s point of view. Should an employee suffer an injury or illness for which you are liable, for example, this insurance protects you against compensation claims and legal costs, which can run into hundreds of thousands of pounds.
2. Determine your liabilities
Even if you are self-employed you may still have liabilities to your customers.
If members of the public visit your business premises (even if it is your own home) or you go out to work at a client’s property, then public liability cover is a protection well worth considering. This provides for legal costs and compensation arising from claims made by someone who has suffered injury or damage to property in connection with your business. A customer may trip on the carpet in your shop for example.
Those who make or sell items should have product liability cover as small defects in these goods could potentially open you up to large-scale claims. This insurance provides protection if the product sold causes injury to your customer or damages their property.
3. Tailored insurance
There are policies tailored to specific trades, such as pub and restaurant insurance, which should take into account the liabilities mentioned above and other specialist needs associated with that line of business. A vet, for example, may benefit from office and surgery insurance which may offer extra cover for their specialist furniture.