In the current unsettled economic climate, it has never been more important to have business insurance. Proper insurance for your enterprise is no longer just a safety measure. It can mean the difference between being able to expand and embrace new opportunities — or the irrecoverable failure of your business.
Some elements of business insurance are required by law. If you run a business with employees, no matter how small, you are legally obliged to obtain Employers’ Liability Insurance. In the event that any of your staff should become unwell or suffer an injury as a result of the work they do for you, this insurance can take care of compensation and other costs — even if your company is in receivership at the time. The legal minimum is five million; that said, most business insurance policies offer at least 10 million. If your business uses vehicles, you must also have sufficient third-party motor insurance to cover at least one million pounds’ worth of damage or injury.
In addition to the insurance legally required by the government, it’s vital to protect your business against other possible claims. Compensation claims made by your employees may be covered by the legal minimum of insurance; however, you also have to consider the possibility of legal action brought against your company by customers or other members of the public.
If an accident or injury occurs on your premises, your company may be deemed to be at fault if it can be proven that you or your staff were negligent in some way. Your company may be liable even if the accident was due to the actions of one of your employees. You may also be liable if goods or services your company has provided should result in loss or injury, whether this occurs on your company premises or not. This can leave you open to ruinously large claims.
As well as the potential for costly settlements if you lose, you can also find yourself and your business struggling even if you win. The expense of effectively defending a claim for negligence can be enough to seriously impact on the financial wellbeing of your enterprise, especially if the case is complex and lengthy. Liability Insurance provides coverage in the event that your business is forced to pay compensation to someone injured as a result of negligence, for example.
Legal Expenses Insurance will cover the cost of defending your case; it can help in protecting yourself against vindictive or frivolous claims by members of the public. Legal Expenses Insurance will also cover your costs in the event that you wish to pursue a claim against someone else — if the negligent or unlawful activities of a member of the public affect your business, having this type of business insurance will help you.
Whatever your field of operations and the size of your business, you will certainly have equipment that is vital to its proper functioning. By insuring the property that you use for your business, you can safeguard your company against the blow that you’d experience if something vital were to stop working or be damaged. This may be particularly important if your business is at risk from vandalism, theft or other interference from the public.
Business insurance is priced according to the likelihood of a claim being made and the probable size of the claim. Insurance providers will therefore assess your business in terms of the hazards it’s apt to face; the consequences of something untoward occurring; and how well you and your employees manage possible risks.
Michael @ The Student Loan Sherpa says
Great advice! Any business is exposed to all sorts of liability, and the risks can be unique to whatever business you are in. Not only should you make sure you are insured, its a good idea to meet with an attorney to make sure all of your personal assets are protected.