Business insurance is completely different from personal insurance. For personal insurance you can simply go to your insurance broker or online to look for exactly what you want. Most of the policies cover the same things because personal insurance is often based on the same threats to the insured item (home, contents, car, personal).
For a business, the insurance world becomes a bigger problem full of complexity and choices that can either properly protect your business or give you financial worry.
So what do you need to know about business insurance?
Picking The Policy
Knowing which policies you need is an important step in the process of purchasing insurance. For businesses there are numerous types of insurance that might be required, depending on the circumstances. For instance, unless you are a one man band, you will need employer liability insurance. This protects you should an employee claim against your business because of an injury or illness they have sustained while working for you. Even a trip up at work can instigate this.
Alternatively there are business interruption insurance policies that help to recover loss of turnover or trading should your property or premises suffer, for example, from theft or fire. There is also public liability and product liability cover to protect you from third party claims.
Which are applicable to your business depends on what you are offering your clients.
The Amount of Coverage
Then there is the amount of coverage you should be insured for. This all depends on the product and your customer base. If you are a small local shop selling fruit and vegetables to the local community, you might not need as much as a professional CV writer or management consultant who works with blue collar businesses.
At the same time, you need to consider the risks your business is exposed to. If you are a high ticket product seller and have relatively few ‘select’ clients, your risk is going to be lower than a company selling to millions of customers that happen to buy their product.
Likewise you have to consider how much you are valuing your assets and business. When you sign up for your insurance, you are likely to have a set value but over time this value could change. Some of the factors that could change include:
• Taking on additional staff.
• A surge in new customers and revenue.
• New premises and assets.
If you don’t cover these changes you may find that you aren’t protected when something goes wrong. For instance, say you have a 50% increase in revenue and take on additional staff because of the workload. Then a fire breaks out at your premises, you lose assets and you can’t complete tasks. If you haven’t updated your insurance, you wouldn’t be able to claim for the loss of earnings due to the fire and would have to pay compensation to the staff yourself, at a time when you’ve got less income than usual – the first step to financial troubles.
Ensure You’ve Got the Right Insurance in Place
It is vitally important that you have the right insurance in place for your business. Ask your broker whether you are covered for various scenarios, even if you think they are unlikely. You might regret it if you suddenly have a need to rely on an insurance policy but aren’t covered.
Insuring a business is nothing like personal insurance. The environment is much more complicated with various policies that can cover you in different ways but don’t cover everything. Also, your business will change and that can mean you are undercovered in the future which can potentially spell financial disaster.
Only by speaking to world class insurance brokers and working with them to find an ideal business insurance product for your organization, can you be sure that you will be covered for all eventualities.
Are you fully covered? Is your coverage the same as your value?
Let us know in the comments below.
• Check with your current insurance provider whether or not you are covered for various scenarios including:
o Theft (on and off premises)
o Employee injury (on and off premises)
o Cyber Crime.