Five Insurance Products to Protect Your Small Business

A recent survey of small business owners found that just 26% of those asked had insurance cover for their enterprise if things go wrong.

The survey by AXA highlighted that a worrying number of small businesses don’t have any protection if the unexpected happens1.

From day to day, the possibility of a fire, accident or even a cyber attack may seem distant and unlikely, but there are some key insurance products that could protect your small business if things don’t go to plan. After all, it’s better to be safe than sorry when it comes to your livelihood.

1. Public liability insurance

Public liability insurance offers protection for your small business if you deal with members of the public. If a member of the public suffers an accidental injury or their property has been damaged due to the fault of your business, your policy will help cover the costs of your legal defence expenses and will pay any compensation due.

Let’s say for example that one of your customers trips while on your business premises, or you accidentally damage an item of a client’s equipment during a meeting. These kinds of scenarios can easily lead to a claim, and your public liability insurance will enable you to defend the claim and protect your own business interests.

Public liability insurance covers anyone who visits your commercial premises, your customers, clients, and any members of the public who attend events you’ve organised through your business. It doesn’t cover your staff.

2. Employers’ liability insurance

If you’re running your own business, you have a legal obligation to take out employers’ liability insurance. You must ensure that your policy covers you for at least £5m. Make sure you know where your EL (Employers’ Liability) certificate is stored, as you will need to show it to any inspectors who visit your business. If you fail to show it, you will incur a £1000 fine.

The insurance company who provides your policy must be on the Financial Conduct Authority register, so either check they’re included on it before going ahead or ask your insurance broker when choosing your cover. Bear in mind that if you are a sole trader you may not need to take out this cover if you only employ a relative.

However, if you are a limited company you will need employers’ liability, even if you just have relatives on the payroll. Employers’ liability will cover your legal defence costs and will pay the cost of any compensation if one of your employees falls ill or suffers an injury which is the fault of your business.

3. Personal accident insurance

If you or one of your employees suffers an accident that means they or you are  unable to work, personal accident cover provides a payout to cover any lost earnings for a specific period of time. Cover is flexible and will be tailored for you.  If you’re self-employed, this cover can help to protect you financially if you sustain and injury and can’t work for a period.

Bear in mind that any business interruption insurance you have will not include cover for personal accident. This means that if you or one of your employees is injured in or outside of the workplace, you won’t be able to claim to support them financially unless you have personal accident cover in place.

It may seem unlikely that you’ll experience an accident at work, especially if you work from home or at a desk but bear in mind that you’ll be covered for loss of weekly earnings even if you’re injured outside of the workplace.

4. Cyber liability insurance

Cyber crime is becoming an increasing threat to business of all sizes2, and cyber liability insurance can protect your enterprise for things like loss of income, damage to your IT systems, any data that’s lost and any reputational damage you suffer because of a cyber attack.

No matter what kind of business you run, it’s likely that you rely on IT in some way. You may find that you’re protected against certain aspects of a cyber threat by your existing policies (such as business interruption or commercial property insurance), but with cyber crime on the rise you may want to invest in a tailored cyber crime policy so you’re protected if the worst happens.

When choosing a policy, consider whether you need first party or third party insurance. Third party cover will protect the interests of your customers, whilst first party insurance will only cover your business’s interests.

5. Business contents insurance

Business contents insurance protects any assets, stock and equipment   within  your business premises. For example, it covers any computers, desks and tools kept in your business premises if they are damaged by a fire, flood or stolen There’s no legal obligation to take out business contents cover, but it can offer peace of mind that your assets are covered if there is a problem.

If you’re not sure whether you would benefit from this cover, think about how you would replace your business equipment if it was stolen during a break in? Would any stock stores on the premises be easily replaced if it was damaged in a fire?

If you think you would struggle to deal with the implications of problems like these financially, business contents insurance can protect you if disaster strikes. Other considerations are the potential loss of income and interruption to trading that can arise in a serious damage incident.

Business insurance from Towergate

We offer tailored business insurance and trade specific policies to suit your needs so that you can pick and choose the cover and limits required for your business.

For more information visit our small business insurance page or call us on 0344 346 0409 to speak to a specialist adviser.

This is a marketing article by Towergate Insurance. The information contained is based on sources that we believe are reliable and should be understood as general risk management and insurance information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such. If you wish to discuss your specific requirements, please do not hesitate to contact a Towergate Insurance adviser.

Sources:

1: insurancebusinessmag.com: Very few small firms have business cover in place – AXA UK

2: www.nationalcrimeagency.goc.uk/what-we-do/crime-threats/cyber-crime

About the author

Mike Stephens FCII is a respected senior industry professional and Fellow of the Chartered Insurance Institute (CII) with well over 40 years’ varied experience in the commercial insurance sector as a commercial insurance broker, underwriter, and conduct manager.