Understanding which insurance policies are essential to have can be confusing – especially for smaller businesses where such decisions are likely to sit with you as the business owner. So where do you start to make sure your business is protected?
We asked our team, “if you were giving insurance advice to a friend or family member for their business, what are the top five policies would you want to make sure they had in place?”
Here’s what they told us – and why:
Employers’ and public liability insurance
As your business starts to grow, the natural progression is to hire employees, but this comes with added risk. It’s a legal requirement to hold employers’ liability cover for any business with employees who are paid, voluntary or temporary. Employers’ liability covers compensation costs and legal fees for claims made in respect of injury, illness or harm caused to your employees whilst working for your business where it is alleged the business or an individual at the business has been negligent.
If you interact with the public in any way or have clients visit your premises, we highly recommend you have public liability cover in place. After all, accidents can happen and compensation claims can be costly.
Business interruption insurance
Business interruption insurance is often misunderstood – many people believe their buildings and contents insurance will provide the cover they need to continue to trade following an unexpected event, such as a break-in, fire or flood. Think again.
Business interruption insurance is designed to cover the knock-on effects and loss of profit and income during periods when your business cannot operate as usual because of an unexpected event.
Material Damage
Think of this as the business equivalent of your home insurance. Problems caused by storms, fire or flood can quickly escalate. Buildings, content and property damage insurance, also known as Commercial Combined, can include anything from rebuilding and debris removal to stock replacement and production downtime, ensuring that any damaged caused to your business doesn’t affect your overall profits. It may also be a legal requirement under any loan or lending agreement.
Directors’ & Officers’ insurance
Business owners can be exposed to personal financial risk through the decisions they make in running the organisation. Directors’ and officers’ insurance (D&O) can provide protection for claims made against anyone in or acting in a managerial role for alleged wrongful acts carried out in their various roles in the workplace.
Cyber
Every business – regardless of size is potentially at risk from a cyber attack. And for a smaller business with perhaps fewer resources available, a cyber incident could bring your business to a standstill, or worse.
Protecting your data and systems is crucial to allow you to operate – no business should be without this cover.
Cyber insurance tips for small businesses
Getting the right advice on insurance for your business and understanding the level of cover you need is so important. Having the right policies in place but for the wrong sum insured could leave you exposed to the risk of underinsurance, which can be extremely costly in the event of a claim.
We’re here to help you understand the risks you face and build resilience to help protect your business – whatever size or shape it may be. Reach out to our advisers, who will be happy to answer any questions you have.