Small business owners must consider the risks their business faces on a daily basis and ensure they are adequately protected with insurance.
As a minimum, employers liability is legally required for employees but there are other assets to consider protecting too. The most common insurance covers for business are explained here:
Saving money on your overheads during a recession is essential. You could be tempted to not bother renewing your policy. The question is – could your business afford the cost of a successful claim against you?
Public liability insurance will cover you if someone is accidentally injured by you or your business operation. It will also cover you if you damage third party property while on business. The cover should include any legal fees and expenses which result from any claim by a third party.
One of the major issues facing small business owners, particularly smaller premises where space is tight, is lack of storage. If products are temporarily, or accidentally, left hanging around and cause an accident, it is the small business owner who could be held responsible should the injured party make a successful claim.
A common level of public liability cover is around £2 million, however premiums can vary dramatically at this level of cover so take the time to get the best possible price by comparing quotes offered by various insurers.
It is a legal requirement for every employer in the UK to protect their employees against risks in the workplace – the minimum legal cover requirement being £5m.
With legal firms reporting rising compensation claims from staff during the recession, and average claims for accidents at work standing at £16,000, now is the time that managers should be focusing on the safety of their employees.
As well as the usual health and safety precautions, such as ensuring properties are well maintained, small business owners should also take into account situations where they could be compromising the safety of their staff without realising. For example, if your business stocks high risk or valuable products you should avoid leaving a sole member of staff on a late shift as not only could it lead to a greater propensity for stock being stolen you may also face a claim from the employee for failing in your duty of care.
Defective or dangerous products are the cause of thousands of injuries every year in the U.K, yet product liability is a cover option which many small business owners commonly overlook.
Naturally, small businesses who distribute goods either by retail or wholesale often assume that because they are only selling products rather than manufacturing them, any blame for faulty or damaged goods does not lie with them. In fact, retailers or wholesalers have a legal obligation not to sell dangerous goods or products that are not fit for purpose.
Even if the retailer or wholesale has done everything to ensure the quality of products sold, in these changing times a manufacturer may no longer in business or the importer can’t be traced, meaning you could be held responsible for a costly claim which could threaten to cripple your business if there is no obvious right of recourse from the manufacturer.
Property insurance protects the assets of your business against loss or damage some examples of the types of assets include buildings, general contents, machinery, and stock Cover is often provided on an all risks basis and will include theft other types of protection available include business interruption, goods in transit and engineering failure.
If you were to suffer a fire or flood at your premises and your stock, contents and IT systems were destroyed, along with damage to the building which requires repair. The right level of business cover would enable you to continue to trade while your premises are being repaired and even offer cover for any loss of business during this time.
Theft is another issue facing small businesses which property insurance can cover. Recent figures from the Home Office highlighted that non-domestic burglary is on the rise, and in the final quarter of 2008, there was a four per cent rise compared to the same period the year before.
There are a number of steps small owners can take to reduce the risk of a break in, including CCTV, locking valuable goods away and reinforcing locks and security doors. Property insurance should also be high on the agenda in case the worst happens.
If you’re in the business of selling your expertise or skills then it’s important you think about taking out professional indemnity insurance.
Professional indemnity insurance is typically regarded as essential cover for landscape architects, computer consultants, accountants, lawyers and photographers, to protect them against potentially financially crippling and often reputation-damaging claims by dissatisfied clients.
No two businesses are the same and there is no single amount of cover that suits all. Often, your client will set a minimum limit of the indemnity they require. This can depend on the specific nature of the services you’ve been contracted to provide, or they could have a set limit for all their service providers. For example, many UK government departments will require their contractors and consultants to have at least £5 million of cover.
Directors and Officers
As the Director or Officer of the company you can be held personally liable for acts undertaken in running the organisation and as such can be held financially responsible personally for such liability. Directors and Officers insurance protects against this, providing financial protection for officers, directors or managers of the business for acts undertaken in the running of an organisation, including those involving negligence and breach of trust arising from an honest mistake. This ensures that the Director or Officer’s personal wealth is not at risk.
Irrespective of a company’s ‘limited’ status, directors can be held liable for decisions made on the company’s behalf – whether or not they were directly involved. A workforce may feel under pressure to meet ever decreasing timelines and as a consequence they elect to reduce time spent on quality control, resulting in a consignment of faulty goods going to market and causing serious injury. As a result of this, actions are likely to be brought against the company for damages, but they also may be brought against directors or senior managers of the company personally for being accountable in bringing about a culture of reckless disregard to quality of items being produced.
Insurance cover can include inquiry costs, pollution defence costs and loss of documents among other options. It’s certainly worth consideration if you’re in a position of responsibility.
www.Insurantz.com — the easy way to insure your business
The good news is that rather than being a lengthy process, insurance products can be bought very quickly online. Receiving a quote and getting cover can be completed in five minutes, so even if a shop owner has a problem with their current cover, this can be overcome quicker than ordering a pizza.
Get a quote at www.insurantz.com or call us on 0845 408 1800 for more information — without any obligation — .
Insurantz’s top tips to finding cheaper business insurance
1) Online policies could be cheaper
Traditionally websites are cheaper to run than call centres or high street brokers as there’s no premises and little in the way of labour costs, so companies are able to pass on a discount to customers. So it’s sometimes worth looking online for a discounted quote.
2) Only pay for what you need
Some packages include certain covers such as Public Liability as standard, but in some cases you can also add on options that you need for contents, stock and buildings. These packages bundle everything together for your trade, so you only get the cover you need.
3) Hunt out interest-free deals!
Look and you’ll find some insurers charge 0% interest for monthly direct debit payments saving you money and helping your cash flow.
4) Look for price guarantees and money back offers
It’s not just supermarkets that do good deals! Some insurers and brokers also offer fixed premiums and price guarantees. For example, Insurantz.com offers a 28 day double the difference paid if you find a better deal plus a guaranteed premium for 2 years.
5) Location, location, location!
Consider location seriously before you buy or rent your premises. City centre locations traditionally attract higher premiums as they sometimes have a higher theft/claim rating. If you don’t need to be on a high street for your business, it may save you money on rent and insurance if you choose an out of town location instead.
6) Protect what’s yours!
You can sometimes reduce your premium by taking some simple steps to ensure that your business is as safe as possible. This could be as easy as implementing a Health & Safety policy for staff or re-enforcing your business security with roller shutters.
The purpose of this article is to give general information only and should not be construed in any way as advice.
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