Commercial insurance

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Protecting your business

Business Insurance

As with owning a car, you are legally required to take out certain insurances when running a business. If you don’t you can be fined heavily and could put your entire operation at risk. It’s also sensible to have some of the many optional business insurance policies available to cushion you from nasty shocks.

Business insurance policies you are legally required to have

Employers’ liability insurance

Once you take on your first employee, you are required by law to take out employers’ liability insurance. This will protect your employees if they fall ill or are injured in the course of their work. Your insurance certificate must be displayed where your staff can see it.

You don’t need employer’s liability insurance if your limited company has just one employee, who owns 50% or more of the share capital (i.e. you). If you are a sole trader and do not employ anyone, or you only employ close family members, you should also be exempt.

Even if you don’t have any full-time employees, and just occasionally hire staff or use temps or seasonal workers, you must take out cover. You can be fined up to £2,500 per day if your business doesn’t have a suitable employers’ liability policy. The size of the potential fine dwarfs the cost of cover so it’s not something you should delay.

Buildings insurance for your premises

If you own your own commercial premises, you must protect them, just as you do your home. At the most basic level, this means a business buildings insurance policy that will cover any damage to your premises in the event of a fire, flood, or some other catastrophe.

Although it’s not obligatory, it makes sense to take out cover for fixtures and fittings and any stock you might have on your premises. Most commercial property insurance policies will allow you to include these options along with the basic buildings insurance.

If you lose your premises and entire stock in a fire, will your policy pay out a sum quickly to help your business get back on its feet? Remember to check what levels of stock are covered in your policy.

Public liability insurance

Public liability insurance is required by law if members of the public come to your premises, or could be hurt in any way by something your business does. A public liability insurance policy will cover you for any damages claimed, plus legal representation.

Industry-specific insurance policies

If you are part of a recognised profession, check with your industry body what insurance policies they insist, or recommend you hold. For example, solicitors are required to carry an insurance policy in order to practice law.

Business insurance policies you should have

Professional Indemnity (PI) insurance

Professional indemnity, or PI insurance, gives professional businesses protection against claims made by their clients, for any damage caused by professional negligence.

Many firms, particularly larger organisations, now require you to have PI cover before they will hire you. With this being common practice in many industries, professional indemnity insurance is effectively a must-have for the majority of contractors and freelancers.

Even if you’re not required to have it by your clients, it is advisable to have professional indemnity insurance if you offer any kind of service to businesses or the public.

Director’s & Officers insurance

Director’s & Officers insurance covers the legal liabilities you have as a director of a limited company and any legal costs if you get something wrong. This type of cover is also frequently referred to as D&O insurance.

Product liability cover

If you make, repair or sell products, you could be held liable for any injury or damage caused by defects.

And a selection of more specific business insurance policies you could buy

Business continuity insurance

Also called business interruption insurance, this will protect you against any disruption that could lead to loss of revenue, such as a major catastrophe. You should aim to cover events not already included in your other insurance policies, or where there will be a longer-term disruption (such as total loss of premises).

Key person insurance

If your business would grind to a halt if you, or another employee, was badly injured or killed, key person insurance will protect the business against loss of revenue while a replacement is found.

Fidelity guarantee

This cover protects your business against loss of money or stock if one of your employees is dishonest. It’s unlikely to be cost-effective until you have a significant number of employees.

Trade credit insurance

Will payout if you have a bad debt. Definitely worth looking at if you sell a small number of high-value items or high-value contracts.

Goods in transit insurance

If you shift large amounts of stock around, this will give you extra protection from accidents or theft.

Money insurance

If you hold large amounts of cash or other valuable documents, this may offer you some protection against loss or theft.

Plant and business equipment cover

If you rely on key expensive machinery, get it insured in case it’s damaged or stolen.

Engineering insurance

Provides cover against the electrical or mechanical breakdown of essential equipment.

Getting quotes and buying business insurance

It’s always a good idea to get several quotes. Many insurance websites will give you a quote if you provide some basic details, so it doesn’t take much time to get a few.

Finally, one important thing to remember the cheapest quote may not be the right policy for you.

Morgan Financial Solutions work alongside a number of trusted partners and master brokers in order to source the most suitable deal for you.  After an initial consultation, and with your permission, your details will be passed to the master broker who can best fulfill your needs and they will guide you through the process to completion.