From professional indemnity, to public liability, directors and officers, to cyber insurance – if you’re new to the world of business insurance, it can all seem slightly overwhelming. Within this blog post, we will be discussing the insurance policies that you require as a small business, those you should consider, as well as some tips on what to think about when buying.
Are There Any Insurance Policies That I Must Have For My Small Business?
If you are a small business that employs staff, then you are legally obliged to have Employers Liability Insurance (EL). Employers Liability Insurance will protect you if one of your staff, or former staff members, claims they suffered an illness or injury as a result of their work for you. If this situation occurs, Employers Liability Insurance will cover any legal and compensation costs that you may face as a result. If you are not correctly insured, you also may be fined £2,500 by the Health & Safety Executive (HSE) for every day you aren’t properly insured.
What Other Insurance Policies May I Need?
Whilst Employers Liability Insurance is the only policy that you are required to have by law, there are other numerous insurance covers that you may wish to consider.
Public Liability Insurance
Public Liability Insurance protects you if you or one of your team causes injury or property damage to a member of the public. Accidents can happen anywhere, including on your premises, whilst visiting clients at their offices, attending events – the list can go on and on. Potential legal fees and damages following on from such an incident can be extremely big, therefore it is important to have public liability in place. Clients and suppliers often ask many businesses to have a certain level of public liability, so this is another incentive to ensure that you have the right level of protection.
Contents And Portable Equipment Insurance
Another vital cover is Contents Insurance which protects all the physical tools, tech and equipment that you use to run your business. Your belongings are potentially at risk of theft, loss or damage due to fire or flood, and would be likely be extremely expensive to replace. There are two types of contents cover that you may wish to consider:
- Office Contents: This will cover anything on your premises, including furniture, fit-out and fixed equipment.
- Portable Equipment: This will cover any equipment that you take out of the office with you such as smartphones, laptops, tablets and cameras.
Most businesses choose to invest in both.
Professional Indemnity Insurance
For small businesses who offer a professional service or advice, Professional indemnity insurance is a key policy to add to your list. Professional Indemnity Insurance will protect you if your client suffers (or claims to suffer), financial losses or reputational damage as a result of a mistake or bad advice on your businesses part. Similarly, to Public Liability Insurance, you may also find that your clients request that you have obtained Professional Indemnity Insurance to ensure that you’re both protected if the relationship goes awry.
Directors’ And Officers’ Liability Insurance
Directors and Officers Insurance, often also called Management Liability Insurance, is one that tend to get overlooked. This type of insurance is specifically for the founders and directors of your small business, rather than the business itself. Directors and Officers Insurance will protect those with management responsibilities against any claims that they have personally done something wrong, and also covers any defence costs, fines (where legally permitted) and compensation demands that they could face. With company directors at risk of disqualification, it may make sense to obtain this type of cover. Plus, you’re likely to find that investors want you to have this, so it is therefore an important cover to sort out if you’re sourcing funding.
Start-up founders and directors have to be particularly careful when purchasing Directors and Officers Insurance, to ensure that they’re covered for some of the biggest risks they can face running an early-stage business. Firstly, you may wish to ensure that your policy covers you for insolvency. Secondly, check that you’re covered for claims made by large shareholders (those who have more than 15% of the business).
Cyber Liability Insurance
Lastly, with the huge rise in cyber-attacks and data breaches seen in recent years and with business holding increasing amounts of data, Cyber Liability Insurance is growing in importance. This will protect you in the event of a cyber incident, covering the following areas:
- Legal and compensation claims
- System downtime
- Fines under GDPR (where legally insurable)
This type of cover will also provide legal, IT, PR and customer service support to help you respond effectively following a breach.
How To Get Insurance For Small Business
At John Heath Insurance Brokers, we can provide cover for many types of small businesses and can provide all of the policy coverage that we have mentioned in this article. As one of the UK’s leading online Insurance Brokers you can choose to do business with us online where you will find our bespoke ‘quote & buy’ facility for Professional Indemnity, Liability and Directors & Officers Insurance. We offer nationally competitive quotes and you can buy your policy online and obtain policy documentation within a few minutes. Alternatively, you can contact our team who are always on hand for a free, no obligation quote.