If you run a business, depending on which country you are operational in, you are obliged by law to take out certain insurance policies. Failure to do so can result in a large fine, and put your business at significant risk. In addition to taking out mandatory insurance cover, you may also wish to consider some of the numerous optional insurance policies designed to offer financial protection to business owners.
In the UK, for example, if you employ one or more persons you are legally obliged to take out Employer’s Liability Insurance. This type of policy covers your employees should they suffer an illness or accident during the course of their work. The insurance certificate must be displayed in your business premises, and be visible to all staff. Even if you only hire staff occasionally, perhaps seasonally, you must take out cover, although if you are a limited company with just one employee who owns in excess of fifty percent of the share capital, a sole trader, or you only employ immediate family members you should be exempt from the law. If you fail to take out Employer’s Liability Insurance then you could face a large fine; up to £2500 per day!
If clients regularly visit your premises, or could be injured during the course of you carrying out your business, then it may be worthwhile taking out Public Liability Insurance. This type of policy will cover you in the event that someone makes a claim against you for damages. Although not compulsory, some organisations will insist that you have a Public Liability Insurance policy in place before offering you a contract, or allowing you to carry out your business on their premises.
If you own the property from which you operate your business then you will need to take out Buildings Insurance to cover your property against fire, flood, and other natural disasters. You should also cover the contents of your business property including any stock that you store on the premises, plus fixtures and fittings, including IT equipment. Specific Glass and Sign cover is also available should you have a shop with expensive signage, or a large window, as these may not be covered by other insurance policies if they are destroyed by vandals.
If you run a company vehicle, or vehicles, then you must make sure that you take out adequate Motor Vehicle Insurance. Fully comprehensive cover is preferable as claims made on a company vehicle insurance policy are likely to be more frequent than those made on a private car policy.
Disruptions to your business caused by, for example, serious damage to your business premises, can lead to financial ruin. To safeguard against this eventuality you can take out Business Continuity Insurance; make sure that you obtain cover for events that are not already covered by any other existing insurance policies you have in place. Key Person Insurance is similar to Business Continuity Insurance in such that it safeguards your revenue should you, or another vital employee, be killed or suffer a serious injury. This type of policy protects against loss of revenue until a suitable replacement is found.
If you are a contractor, freelancer, or consultant then it may be in your favour to take out Professional Indemnity Insurance; infact, some larger organisations will insist that you have this type of cover in place before they will agree to hire you. Professional Indemnity Insurance covers you for claims made against you by your clients for damage incurred as a result of your professional negligence, so is advisable if you offer any kind of professional service to the general public or to other businesses.
If your business relies heavily on designs, trademarks and patents then you may wish to take out Intellectual Property Insurance. This type of policy will protect you if a competitor attempts to steal your ideas, which are known as intangible assets, and are often the cornerstone of many modern businesses.
If you, or your employees, travel overseas during the course of your business then you need to make sure that you take out adequate Travel Insurance that will protect your/their belongings, for example, money, laptops, and mobile phones, in addition to providing help and assistance in emergencies.
Product Liability Cover is a useful type of insurance policy for those businesses that manufacture, repair, or sell products. It covers you against claims made against you for damage to property, or personal injury caused by any defects. In addition, if, as a business, you tend to sell a small number of very high value items you can take out Trade Credit Insurance which will pay out if you incur a bad debt.
There are a vast number of different insurance policies created specifically for business owners. Depending on the country in which you live, and whether you are a member of a professional organisation (solicitors, for instance, are required to take out an appropriate insurance policy in order to practice law), some are obligatory whereas others are merely advisable. Take time to consider what type of insurance cover would be the most beneficial to your company, and always shop around for the best deals as premiums can vary considerably between insurers.