No business owner wants to contemplate the unpleasant possibility of damage or loss, but being unprepared is even worse. Proper business insurance is one of the surest ways of protecting your resources and has become a necessity for doing business.

The choice can be bewildering though, so to help determine which insurance products are right for your business, we’ll examine five different types so you can assess what’s right for your organisation.

Employers’ liability insurance

Unless you are self-employed and have no staff, employers’ liability insurance is a legal requirement for your business. It not only protects your employees but also your company in the event that a staff member should suffer an injury at work or falls ill as a result of their job. This regulation also applies for temporary staff, apprentices and volunteers. The minimum cover permitted by law is £5 million and you can be fined up to £2,500 for each day you’re not properly insured, so it definitely should not be overlooked.

Public liability insurance

Although not a legal requirement, if your business has any contact with third parties then you are probably going to want public liability insurance. If a customer, guest, client or employee of another business (such as delivery personnel) enters your place of business, whether home or office, and is injured in any way or their property is damaged, at least you will be financially protected.

Professional indemnity insurance

Professional indemnity insurance is especially relevant to businesses that provide professional advice, expertise, or are responsible for the intellectual property of others. This insurance protects your business if a customer thinks that you have cost them time and money through negligence of service or advice. For some professions like accountancy, law, consulting and architecture it is a necessity required by their professional bodies or regulators.

Commercial buildings insurance

A commercial buildings insurance policy protects your premises against potential risks, such as flooding, storm damage, fires and theft. Although not required by law many mortgage providers will insist that you have a policy before issuing a loan. If you are leasing your facility then it is the responsibly of the landlord to insure the premises, unless your business maintains a shop front. If so, the premise insurance generally becomes the tenant’s responsibility. The level of coverage will vary between insurers, but it is a good idea to think about insuring your facility to the full cost of reconstruction.

Business assets insurance

Whereas business premise insurance protects your building, business assets insurance provides coverage for items within the premises. If your business uses a lot of critical equipment or machinery, protecting it from loss or theft is probably a smart choice. A ‘new-for-old policy’ compensates you the full amount needed to replace a pilfered or damaged item. A less expensive option, called indemnity insurance, takes into consideration the usage and depreciation of the old equipment and reimburses you accordingly. It is important to inventory your equipment and evaluate which plan is a best fit for your business.

There are plenty of additional types of insurance that business owners can consider. It may be worth looking into taking out income protection insurance as well as business insurance; to protect the personal income you take from your business should you fall ill or suffer an accident that prevents you from doing your job.

Determining the right insurance option for both you and your business is a decision not to be taken lightly but hopefully this guide should give you the basic knowledge to begin exploring all your options in a lot more detail.

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Published by NYK Media as part of www.Frugaleur.com and the Scottish Multimedia web project

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