These are independent firms paid by invoice to complete a job, including their own labour, tools, and material costs. Working under their own supervision, they are responsible for arranging their own insurance.
They provide labour only and work under the direct supervision and control of the Employer, who pays them for the hours/time worked, supplying tools, materials, and instruction. Labour only sub-contractors are considered as an employee for Employers Liability Insurance.
Commercial Building Insurance covers the cost of repairing damage to the structure of your property, including garages and outbuildings caused by a range of specified insured perils. Your buildings sum insured must represent the full rebuilding cost of your property at today's prices, including materials and labour (rather than the market value). You should also make sure you allow for your VAT status if you are unable to recover VAT.
Providing cover for damage or loss to equipment or plant that you use in the day-to-day course of your business. It is essential to ensure you have adequate business equipment insurance cover to protect any expensive items of plant and machinery and equipment that your business needs to function. It’s important to advise us if you require cover on items away from your business premises.
A business insurance that covers you financially for loss of gross profit if you have to close your premises to sort out issues caused by an incident for which you are covered, such as a fire, burst pipe, flood, etc. (check your policy documents for full details). This includes financial assistance for setting up temporary premises to mitigate your reduction in turnover. It is important to fully assess the period of recovery to ensure that this ties into the point that you return to trading at your pre-loss turnover. This is period is called the Indemnity Period and it should be tailored to your business – 12, 18, 24, or 36 months?
Commercial Combined Insurance is a single package policy that brings together a number of different commercial insurances. This could include commercial fire and theft cover for buildings, business equipment, machinery and stock, business interruption, and goods in transit.
Relates to the indirect costs arising from property damage or personal injury claims. For example, in commercial fire insurance, where a fire at your business premises causes damage to your equipment, this would be a direct loss. Your consequential losses would be the interruption to your business causing a reduction in turnover and earnings as a result. This is also known as Business Interruption.
In a liability claim involving personal injury, illness or disease, financial losses may be incurred as a consequence of the individual being unable to work, requiring medical and/or long-term care. Provided that the identity of the person or firm being held responsible is known, these losses could form part of a negligence claim against the third party to recover such costs and other expenses.
Contents will include furniture, machinery plant, and all other contents in your work premises, valued on new for old basis at today’s replacement prices. Items such as stock, materials in trade, and work in progress will be separately itemised in the cover schedule and should be valued on the replacement cost to you, not your sell on values. Typically, contents cover will be for loss or damage following fire, flood, malicious damage, theft, and a range of other specified insured perils (to include accidental damage and subsidence, if required)
Commonly used by builders and other tradesmen, this is designed to cover loss or damage caused to the actual ‘Works’ taking place on site. If an insured event, such as fire, flood, storm, vandalism or theft, results in damage to work that’s underway on site, contracts work insurance will pay for the costs of labour and materials to get back to the construction point that you had reached prior to the loss.
This is the maximum amount of money that the insurance company will pay for a claim that is covered by a specific section item or the policy as a whole. Variable limits can apply according to the policy wording you have purchased.
Employers Liability Insurance is a legal requirement for anyone who employs staff and covers you should one of your employees make a claim against you, alleging they accidentally became ill or are injured due to the work that they do for you as a result of your negligence.
Also commonly known in the UK as Professional Indemnity Insurance. It is designed to protect you against legal costs and compensation claims if a customer alleges that you provided faulty or inadequate advice and services resulting in a claim against you. An important insurance if you offer advice, management or consulting services.
This is the amount that you have to pay towards a claim. For example, you had a theft at your business, and you made a claim of £1,500 on your business insurance. If you had a theft excess of £100, you would responsible to pay that first amount towards a claim. Typically, an insured claim would be paid less the excess applicable.
These are events or conditions that are not covered by the insurance policy.
Common exclusions can include tools kept in the work van and not locked up whilst vehicles are left unattended during business hours. Additionally, further cover exclusions will be applicable for theft occurring overnight between specific hours whilst the vehicle is left parked overnight. Typically, theft is excluded between the hours of 21:00 and 06:00 daily, unless the vehicle is securely locked in a premises overnight.
This is the total amount you pay for your cover. It includes the net premium, including any commission payable to us plus Insurance Premium Tax at the current rate, i.e. 12.5% as of 29/04/21.
Insurance Premium Tax (IPT) is charged by HM Revenue and Customs. The cost of this is shown separately but it is automatically included in the total premium cost. The current rate is 12.5% as of 30/06/21 (other than Personal Travel Insurance at 20%).
Cover in the event of death of a key individual that a business depends on for its continued management and profitability. The sum of money paid can be used to cover the cost of hiring and training a replacement and can also pay for reduced profitability.
For more information, see our Guide to Key Person Cover.
This is a complex type of insurance that covers the legal defence costs which are incurred in defending or pursuing a claim against a third party. Typical packages will include employment disputes, property protection, and contract disputes. Many policy variations are available, so it’s important to discuss your requirements with our advisors as there are specialist extensions that would be required for landlords requiring tenancy disputes insurance.
Office Insurance can include buildings if the premises are owned, as well as the standard loss or damage cover for contents, tenants’ improvements, fixtures/fittings, computers, other electronic equipment, and loss of income. It usually also includes Employers Liability and Public Liability Insurances.
Also known as Personal Injury Insurance. This will pay out if you suffer a serious injury or death as result of an accident. Very useful for the self-employed, cover can be arranged on a 24-hour basis, covering accidents at work, home or at play.
Insurance to cover both hired-in and owned equipment and machinery against accidental and malicious damage, fire, and theft risk.
Cover can be arranged whilst at own premises only or including whilst away.
This is the cost you have to pay to the insurer for your insurance cover. This can be paid annually or there are often options to split the payment into monthly instalments and pay by direct debit.
See our dedicated page for more on Direct Debit payments.
Professional Indemnity Insurance is ideal if you provide advice or consulting services to clients. This cover can pay for legal defence fees and compensation claims made against your business by clients who allege you have provided poor advice or made mistakes. Many professional associations require members, such as accountants and architects, to have this cover for minimum levels.
Public Liability Insurance cover protects you and your business should a member of the public hold you responsible for accidental third party property damage or bodily injury due to your negligence. It covers your legal defence costs, and should you be found to be at fault, will pay the resultant compensation costs and court awards up to the limit in your policy. Limits of indemnity are available from £1 million to £10 million, with higher levels available on request.
For more information, see our Guide to Public Liability Insurance.
The amount that it would cost to completely rebuild the property, including materials, labour, professional fees, and site clearance costs at today’s prices. VAT will need to be included if you are not registered for and unable to recover VAT.
The process to identify, assess and control threats to a business. The threats or risks can include accidents, management mistakes, legal obligations, and financial and economic uncertainty. The aim is to then compile and implement a risk management plan to prevent, eliminate, control, or minimise the risks. This thereby protects the business, staff, and general public, improving the speed of business recovery should incidents arise.
Learn more about Business Risk Management by viewing our Interactive Infographic.
This is the maximum amount specified in an insurance policy that will be paid by an insurance company in the event of a claim.
In insurance, you are the “first party” and the insurer is the “second party”. The “third party” is not involved in the insurance contract but, in business insurance, could be a member of the public, a customer, or a supplier.
When you don’t have sufficient insurance in place to cover everything you are insuring and have underestimated the total replacement or reinstatement values at today’s prices. For example, if the cost price today of your tools and equipment is £5,000 (buying brand new), but you only insure them for £2,500, then you are underinsured by 50%. In the event of a claim, it is very likely that an insurer will reduce your claim proportionately by 50%. Many property insurance policies include an Average clause, enabling them to adjust payments in this way.
For more information, see our Guide to Avoiding Underinsurance.
Whether you’re a large business, SME or sole trader, work from home or have a property empire - Towergate have got an insurance policy for you. For more information, visit our dedicated business insurance page.
Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.
Date: July 02, 2021