When owning a business, there are numerous different things to consider, including the many different factors you can be made liable for. This is where business insurance comes in. No matter how big or small a company is, you’ll most likely find that your business needs some form of insurance to help manage the costs in the event of a liability claim or property damage.
Without insurance covering the cost of such instances, this can have devastating impacts on a business’s finances. Therefore, it is vital to know exactly what type of insurance can help to protect your business, helping to secure its future success.
Through this piece, we will be exploring the different types of business insurance out there, when you need it, and why.
What is Business Insurance?
There are many different policies that fall under the term of business insurance. However, in its most basic form, business insurance is a security measure that can help to protect a company against any losses it may encounter. Such losses can often be unavoidable, and come with the territory of owning a business. Therefore, in order to sufficiently protect a company against severe financial losses, business insurance is a must.
There are many different types of business insurances out there, with some being legally required for any and all forms of business, and others being tailored to specific types. Some of the main forms of policies throughout the UK are as follows:
- Employers’ liability
- Professional indemnity
- Public liability
- Product liability
- Personal accident
- Business contents
Although this may look like a lot, it’s not applicable for all businesses! Only a few are legally required in the UK, with the rest dependent on the type of business you own.
What is Legally Required?
Employers’ Liability is the one type of insurance that is legally required for all businesses with employees. Whether full time, part time or temporary, whatever the employment situation, under the UK law businesses with any form of staff must have this type of cover.
Employers’ Liability Insurance covers the cost of employee’s compensation claims. These claims are typically made when a member of staff has suffered some form of illness or injury that has been directly caused by the nature of their work. Applying for Employers’ Liability Insurance not only ensures you are in-keeping with the county’s standard legal requirements, but can also help to financially protect a business from hefty out of pocket charges.
Although Employers’ Liability is one of the only legal insurance requirements for businesses in the UK, dependent upon the nature of a business, other types of insurance may also be needed in order for a company to operate under UK law. For example, any sort of area your business is concerned with that includes a professional service (such as solicitors, healthcare professionals etc.) will also require Professional Indemnity Insurance.
Professional Indemnity Insurance, as mentioned above, is required when a business offers some form of a professional service. This cover is needed as it protects professionals within the company when they make mistakes. If a client were to sue the business for such a mistake, the Professional Indemnity Insurance could cover the legal costs or compensation claims they made.
Other Types of Business Insurance
Aside from the covers already explored, there are many other types of business insurance policies out there, all built with the aim to protect. However, each insurance will be tailored to a specific type of business. Therefore, it’s important to know the ins and outs of all the main policies on offer, and which ones you might need.
Public Liability Cover
This type of insurance should be considered if your business interacts with the public in any way. Public Liability Insurance is taken out by businesses who frequently deal with members of the public, such as restaurants, shops and hairdressers. It can protect against compensation claims made by members of the public against a business.
Product Liability Cover
If your business offers a product, Product Liability Insurance can help to protect you against any damages customers might suffer from faults in said product. Businesses can still be liable for damages done even when the product was made by someone else, therefore it is always worth considering such a policy if your company deals with this area in any way.
Business Contents Cover
For those with bricks and mortar offices, Business Contents Insurance can help to cover the cost of any contents within the business’s building that are damaged, stolen or lost. This type of insurance will cover the cost of such contents through either repairs or full replacements, and can go a long way in helping to financially secure a business in the unpredictable event of a burglary or fire etc.
Personal Accident Cover
Personal Accident Insurance can cover the cost of accidents that result in death or serious injury. This type of insurance typically pays out for medical costs and loss of income due to the accident.
There are many different types of insurance policies out there, all put in place to help protect, and further enable a business to flourish and grow. To equip your business with the best start, it is therefore vital to consider all potential policies out there, helping to secure its survival through any eventuality and increasing its chance for successful growth.
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