Do companies need small business insurance cover?
Insuring certain aspects of your small business is essential. Some types of small business insurance you may wish to take out for peace of mind (such as contents insurance), others are required by law. You should seek professional advice and make sure you take out the appropriate cover for your business needs.
You can also click here to obtain an instant online small business insurance quote (including options for professional indemnity, liability and small office cover)
Legal Liability Insurance Types
1) Public Liability - this type of insurance will protect you against claims from third parties as a result of injury (or death) or harm done to property as a result of any of your business activities. This type of insurance is unlikely to apply to say, a web design company, but would be necessary if members of the public had access to your business premises (e.g. a shop or service centre).
2) Employers Liability - this type of insurance protects your business against claims from any employees you might have, including claims for accidents and sickness.
3) Professional Indemnity Insurance - this covers your business if it acts in a professional capacity in the course of business. In some professions, such as accountancy, taking out PI cover is a legal requirement. In other professions, most notably IT consultancy of any type, it is ofter recommended and even insisted upon by third party clients if you are working on IT projects on their behalf.
4) Directors' Insurance - even though the nature of running a limited company 'limits' claims against its directors, in some cases (e.g. negligence), directors of limited companies can be sued. This type of insurance protects directors from this eventuality.
Other Types of Business Insurance
1) Equipment Insurance - particularly important if you have PC equipment at home (or on your premises) - if you knock your cappuccino down the back of the base unit, you would be liable to fork out several thousand pounds for a new one, unless you have the correct insurance type in place. This type of insurance will protect your business equipment of whatever nature, subject to the terms of cover.
2) Buildings & Contents Cover - standard insurance to protect your business property and fixtures/fittings. If you are working from home, you may need to inform your household insurer to ensure that this extends to your home business needs.
3) Motor Insurance - standard insurance for business transport. If you use your personal vehicle for business use, make sure your car insurer is updated of your change in circumstances.
4) Legal Expenses Insurance - this will protect you in the eventuality of legal action being taken against your business, including court costs and legal fees.
Posted October 2, 2006
