Business insurance guide

Choosing the right business insurance cover is never easy.

Business owners need to make sure they carry out a comprehensive risk assessment to tailor the cover they need to the way their business operates.

Telling the insurer exactly what sort of work the business carries out, and any special risks involved from the outset avoids any problems when trying to make a claim.

Here’s a check list of just some of the most common issues to consider:

Liability Insurance

Employers’ Liability Insurance

The law requires any business employing staff to have employer liability cover in force.

Health and safety enforcers consider looking after staff a top priority for any business and will come down hard in the courts on any employer they feel flouted the rules.

Employer liability insurance protects a business against claims from staff for sickness or injury caused at work and pays for any associated legal expenses and compensation, including specialist witnesses and court costs.

Public Liability Insurance

Public liability insurance is often sold bundled with employer liability cover and does the same job for third parties who are customers, visitors or bystanders if something goes wrong and your business is at fault.

Other liability cover

Specialist policies will pay out for damage on a client’s site or accidents like roofing slates or signage falling on passers-by outside business premises.

Business Interruption

Business interruption covers firms of any size trading from premises that must close due to an insured risk, like a fire or flood.

The cover replaces lost profits and continuing business expenses that would have been met from cash flow if the business was trading as normal.

Sometimes this cover is referred to as ‘business continuity insurance’

Business buildings insurance

Only the owner of a building has to worry about business buildings insurance, so if you rent your premises, the landlord should have a policy and any claims should be directed to them.

If you own the premises where you trade from, then one of two scenarios apply:

• If you own commercial premises, then talk to your insurer about business building insurance

• If you are home-based, do not rely on your standard buildings policy but tell your insurer you work from home, even if you just run an office and work mainly on a client site. If you rely on standard home cover, any claim is likely to be rejected. Home business cover is also likely to bundle in public liability insurance that covers customers or other business visitors to your home

Add-ons include:

• Trace-and-access cover, which covers the cost of finding water leaks, even if the job involves lifting floorboards or breaking into walls – but not the cost of repairing the leak.

• Fixed glass accidental damage cover – pays for the cost of boarding up and replacing windows, doors and frames

Business contents cover

Whether you own or rent your premises, the responsibility for contents cover lies with the trader.

Again, if you are home-based, standard home insurance is not adequate if you use a room as an office and store stock, raw materials or have business equipment at home.

Depending on your business, contents cover comes with several optional add-ons:

• Money cover – This replaces cash stolen from the premises, but often comes with conditions about security and how much cash can be left unattended on the premises. Money includes stamps, gift vouchers and postal orders

• Key theft – Replacing keys and locks if stolen

• Exhibition cover – Covers damage to property at an exhibition

• Personal accident or assault – Pays compensation to an employee hurt in an attack during the theft or attempted theft of cash from the business

• Tool cover – Specialist cover for tradesmen that replaces essential tools or equipment that are lost or stolen

Business motor insurance

Whether you are a white can man or a business with a fleet of vehicles or heavy plant, specialist insurance to keep your vehicles on the road is important.

Even sole traders, like hairdressers or tradesmen who use their own car for work need business insurance cover.

Add-ons include:

• Goods in transit – Cover for any business goods in a business vehicle that are stolen or damaged on the way to a customer or from a supplier