Sorting out insurance for your small business can be a confusing process. With so many options, legislations and variations of cover available, we can appreciate that sometimes, it’s all too tempting to just brush it under the carpet and hope for best.
As accounting experts, we also understand that the cost of insurance cover can seem like a hefty expense that you’d really rather not have eating into what might be an unforgivingly limited budget every month.
What happens when an employee is injured though? Or there’s damage to your assets after a particularly aggressive April shower? Or a member of staff is in a vehicle collision when they’re out on the road?
Here are some of the main types of insurance cover you really ought to be considering as the owner of a small (and vulnerable) business:
Public Liability Insurance
According to the Employer’s Liability Insurance Act 1969 instated by the Health & Safety Executive, any businesses with one or more employees has a legal obligation to have Public Liability cover. In fact, failing to do so could lead to crippling fines of up to £2,500 per day.
The minimum level of cover for this is £5million but many businesses – even micro businesses and start-ups – choose to cover anywhere from £10million and upwards.
Businesses will be issued with a Public Liability Insurance certificate which must be displayed and easily accessed by all employees. The certificate must be kept for a minimum of 40 years and be quickly produced on demand or else risk hefty penalties of up to £1,000.
It’s worth noting that if you have employees outside of the UK, they won’t be covered, and you will need to look into the policy legislations in their respective countries.
Professional Indemnity Insurance
This type of cover applies to businesses which are providing professional advisory services such as accountants, lawyers and financial advisers.
Professional Indemnity Insurance covers things like the costs incurred when customers make any claims on account of professional negligence, losses and data breaches on your part.
We’re all human and we all make mistakes but it’s paramount that you have the consequences of human error protected with sufficient PI cover.
If your business relies heavily on travel or operation of vehicles, you will need to ensure that you are legally and financially protected.
Whether it’s through individual policies for each vehicle or fleet cover when there’s a large number of vehicles involved, motor insurance is crucial. This applies even when staff are using their own vehicles for anything other than travelling to or from work.
Assets & Property Insurance
Taking out traditional business property insurance is a no-brainer. It will ensure that assets such as equipment, computers, stock and possessions are all protected in case of theft or damage.
How much this costs largely depends on the type and value of assets, the amount of excess you agree on, the location and security of your business, as well as whether your assets are in transit or static.