An unexpected event – such as a break-in, fire, flood, or IT failure – can seriously damage or even destroy your business. Alan Gordon-Freeman of Sirius discusses the importance of insurance for your business.
The right insurance provides peace of mind and financial compensation if things do go wrong. The first step is to identify the key risks facing your business. You can then shop around to find insurance policies that offer the cover you want at the best price.
- By law you must insure against certain liabilities to your employees, customers, and the public. Almost all businesses must buy employers’ liability insurance.
- Employers’ liability insurance covers you against claims from employees for accidents or sickness they may suffer as a result of working for you.
- You must have cover of at least £5 million, though most policies automatically provide £10 million. The policy must be issued by an authorised insurer.
- The insurance must cover all employees, including contract staff and casual workers.
- You must display your Certificate of Employers’ Liability Insurance at each place of business or provide reasonable access to an electronic copy of the certificate to all employees.
- You should keep policy records even after the insurance has expired, in case of later claims.
- Businesses that only employ close family members, or where the owner is the only employee, are exempt.
Many threats are common to all businesses, including fire, theft, and equipment failure. Consider each element individually to ensure your business is adequately protected. Most businesses buy an all-risks policy to protect buildings and contents, this covers a range of risks such as fire, flood, and theft. Specialist computer policies protect you against the cost of breakdowns and loss of information, but they will not cover the cost of upgrading to newer equipment. Money is usually covered by a single all-risks policy, this covers cash, cheques, stamps, and other negotiable documents. The level of cover also varies according to the nature of your business and opening hours. Business interruption insurance offers cover for consequential losses following the original loss, the amount of business interruption cover should be adequate to protect the gross profit as defined by the terms of your policy, including any growth forecast during the indemnity period. Cover should include fixed costs, such as rent, as well as the extra costs of getting your business up and running again.
Ther are other insurances you may be able to add to your policy, such as staff honesty or fidelity cover, legal expenses, key person insurance, public liability, and credit cover. When buying insurance, get professional advice. Shop around for advice and quotes, personal recommendation is often the best way to find a good adviser. Ask around and get at least three quotes, to ensure you are being offered a competitive rate.
The sale of insurance is regulated by the Financial Conduct Authority (FCA). Check that your proposed insurer, broker, or intermediary is registered with the FCA.
It is also worth checking if they are members of the Association of British Insurers or the British Insurance Brokers Association.
Remember, Sirius offer free independent business advice and on-going support. Just call 01482 890146 to arrange an appointment with an advisor, or leave a message by emailing info@sirius-hull.co.uk
