Business insurance

Businesses face many risks from physical damage to lost revenue to personal injury court cases. To stay afloat after losses, businesses can purchase many types of business insurance that cover liability and direct damage as well as protection for employees. Consider which types of insurance work best for your company.

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What is business insurance and why do I need it?

Accidents can happen and any business runs the risk of losing its reputation, cash flow and ability to survive if disaster strikes.

If an employee makes a mistake or a customer slips on your property, you could be liable for costs or get sued. Let’s say you’re a plumber and you incorrectly fix a pipe for a restaurant, which forces it to stop operating for a month. You could be forced to pay out what the restaurant would have earned in that time.

This is why business insurance exists. It offers protection for a range of things like getting sued and much more. If you don’t have insurance, you might have to pay for damages out of your own personal finances.

Types of risks that businesses take

• Injuring someone. Someone slips in your retail shop and sues you for medical bills.
• Damaging property. You own a car wash and one of your employees spills a chemical inside a car.
• Selling faulty products. You accidentally sell fruit contaminated with E. coli and your customers get sick.
• Giving incorrect advice. You provide a client with a flawed building design that needs repairs after it’s built.
• Financial mismanagement. Your company breaches safety or industry regulations and has to pay fines.
• Accidents outside your control. Your business faces a theft, fire, storm, damage or other disaster.

What are the different types of business insurance?

There are a few different types of business insurance policies out there, so you will need to decide which one is the right one for you. Below are examples of some of the types of business insurance you can find cover for:

Professional Indemnity

Professional indemnity (also known as personal indemnity insurance or PII) is designed to cover the potential costs of unforeseen mistakes for both self-employed workers and businesses across many different industries.

Public Liability

Public liability insurance is a type of cover that protects you if your business becomes legally liable if someone is injured or their property is damaged.

Employers Liability

Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you.

Cyber Liability Insurance

Cyber insurance is designed to protect your business against a wide range of Internet-based risks and risks relating to information technology infrastructure and activities.

Business Contents

Business contents insurance will cover damage or loss to your possessions and equipment in your work premises as a result of fire, flood or theft.

Product Liability

Product liability insurance provides cover for people who manufacture, distribute or sell and protects you any resulting financial damages. It’s often bundled with public liability cover.

What type of business insurance do you need?

Make sure you cross these off your list. We’ve made a table to help you determine which of the three main types of business insurance you may need:

Frequently asked questions

• How much does business insurance cost?

  Like most insurance quotes, it depends on circumstance. The amount you pay for coverage depends on what type of business you’re running, how many people you employ and what risks you run. If you’re running a light team of 4 or 5 librarians, your insurance will cost less than if you have 50 architects planning homes across the country.

• How do I know if I need business insurance?

  Nearly every business can benefit from having some form of insurance coverage in place. It offers financial protection against a large number of common risks, giving you peace of mind that your business will be able to survive if something goes wrong.

• What factors affect my business insurance premium?

  Factors such as the type of coverage you apply for, the size of your business, where it is located, the type of business you run and your claims history can all have an influence on your insurance premiums.

• Will I be covered for lost revenue?

  It depends on what’s causing your drop in business. Risks such as an economic recession where demand for your product or services may fall or a close competitor infiltrating your market are not covered by business insurance. But business interruption insurance can cover revenue lost after an unpredictable disaster like a fire or flood.

  Business interruption insurance covers a business for the loss of revenue that it suffers following an unforeseen event. This means that while the business is being repaired, cash will be provided to account for the loss of revenue but not for personal income.

  Check to make sure that the limit in your policy is high enough to cover your business if it shuts down for an extended period of time. Building fires and floods can shut a business down for months or even years.

• How do I make a claim?

  Most insurers will let you make a claim online or over the phone, though the process can vary between providers. In most cases, you will need to supply proof of ownership or legal responsibility and as many details as you can about your claim.