Business insurance is the term used to describe a full package of commercial insurance covers, each policy included within this wider group will protect a business against a different risk. This could be against liability claims, theft, crime, or even loss of income through unforeseen business interruptions.
Depending on your business, some insurance packages will be more appropriate to your commercial enterprise than others. This depends largely on the types of business insurance wrapped up within that product. Understanding which policies are most important to your venture will help you get comprehensive protection.
What are the different types of business insurance?
When discussing "commercial insurance" or "business insurance", what is usually being discussed is professional indemnity, public liability and employers' liability, and perhaps insurance for the premises and equipment. In fact, the business insurances available to UK businesses is a much wider range.
Here are some of the products you might need:
Professional indemnity insurance
Professional indemnity insurance protects you in the situation that a customer claims you have not performed a promised service to a satisfactory standard. This may be through negligence or poor workmanship, defamation, an infringement on intellectual property rights, or breaching the confidence of a client.
Professional Indemnity Insurance is a valuable product for any business that deals with customers’ or clients’ personal information, and if the business provides expert skills or advice.
Public liability insurance
Commercial public liability insurance protects your business from claims arising from a third-party who has been injured or damaged because of your business activities.It’s not a legal requirement for businesses in the UK to have public liability insurance, but it can protect you against costly and damaging liability claims.
Employers’ liability insurance
In the UK, employers’ liability insurance is a legal requirement – no matter what size your business is. This kind of insurance provides you cover if one of your employees becomes ill or injured as a result of a hazard at work which you might not have been aware of.
Employers’ liability doesn’t just cover full-time employees. It’s also a requirement if your organisation enlists the help of volunteers or employs people on a casual or supervised basis.
Personal accident insurance
Personal accident cover is designed to protect your business financially if you were to suffer an injury that leaves you unable to work. The cover can also be applied to key members of staff, such a business partner or director.
Medical malpractice insurance*
If you work in medicine, medical malpractice insurance can cover you for the cost of compensation payments and legal defence, as a result of a patient suffering a mental or bodily injury due to a negligent act, error or omission by you. Claims made for breach of confidence or misuse of any confidential information are also included under this cover.
Product liability insurance
Product liability insurance offers cover for businesses which design, produce and supply products. If your product causes injury or damage to a third party or their property, you could be held liable and have to foot the bill for any compensation costs, plus the legal fees of dealing with a claim. With product liability insurance, those costs are covered.
Business equipment & office contents insurance
A commercial business assets and equipment insurance policy is essential for even the smallest of businesses. As the name suggests, this insurance covers all the equipment and tools you use for your business.Office contents insurance covers the assets you keep and use onsite – which may be crucial to the day-to-day running of your business, such as computers, desks and photocopiers.It’s hard to overstate the importance of equipment and assets in the running of most businesses. Whether that be a computer, a piece of machinery or even something small but essential, such as a set of specialist cooking knives – if something happened to your items, it could be hard to continue business as usual.
Protect your tools and technology on the move with portable equipment insurance or ensure that your onsite assets are covered with a comprehensive office contents insurance policy.
Equipment breakdown insurance
Equipment breakdown insurance can cover problems with your business equipment, from the lowly (but essential) photocopier, up to the breakdown of a network server, or large machinery problems.
Self-employed and sole trader insurance
Being self-employed or a sole trader comes with its own unique risks. Self-employed insurance or sole trader insurance, provides tailored cover to protect you against these risks, including public liability and professional indemnity. Employers’ liability cover is a legal requirement if you have one or more employees. If you work from home, it’s likely that your home insurance won’t cover business property so you can include office contents insurance in your business insurance policy.
Commercial building insurance
If you make money from your property, whether as a landlord, or through running a business on your commercial property – your investment should be protected by commercial property insurance.
Business interruption insurance
Also known as business income insurance. If your business is forced to temporarily cease trading due to events that are outside of your control – such as a natural disaster that damages your business premises – business interruption insurance would cover you for the costs incurred as a result.
Consider, for example, if a flood rendered your office unusable. During the time in which the property was returned to a suitable condition, how would you run your business? And if you lost business as a result, how would you cover the cost? This is when business interruption insurance would cover you for the loss of income experienced and help keep your business afloat.
Unlike business assets insurance, which would include products and non-essential items such as desks and office chairs, equipment breakdown insurance is specifically designed to deal with the repairs and replacement of your work equipment.
As technology progresses and the kinds of crime businesses fall victim to change, crime insurance is a fast-evolving type of commercial cover. These policies will cover your business if it is the victim of cybercrime, theft, damage to money, or fraud.
Cyber and data insurance
A newer version of crime insurance, cyber and data insurance protects businesses against the new and increasingly complex risks which have arisen as businesses become increasingly dependent on computer systems.
Commercial auto insurance*
Much like personal auto insurance, commercial auto insurance covers vehicles for theft and accident, however it is designed to protect vehicles owned by a business and used for commercial purposes.
Accounts receivable insurance*
A key part of any commercial business is its customers. But while your financials might be in order, there’s no guarantee that the people you do with will hold up their end of the deal.
Accounts receivable insurance offers coverage in the event that a customer fails to pay their debts to you. Hiscox includes this cover under Business Interruption Insurance.
Commercial umbrella insurance *
Commercial umbrella insurance (which is also known as excess liability) is insurance for your insurance.
When you take out an insurance policy, it will usually protect you up to a certain financial value. If a claim was made against you in excess of that value, you would be liable to pay for that amount yourself. Excess liability insurance, or commercial umbrella insurance would cover you for the amount which your primary insurance policy did not take responsibility for.
Sometimes shortened to BOP, a Business Owners Policy is term for a combined package of commercial insurances. This tends to be a kind of commercial insurance policy for smaller business with relatively low annual sales.
Insuring a business may seem complex, but understanding the various risks associated with any commercial enterprise is an important step towards protecting it. Thankfully, most types of commercial insurance can be bought together, and experienced brokers will be able to put together a package that suits your business.
To get a quote tailored to your business needs, apply for a quote online or speak to one of our brokers today.
*Please note, Hiscox does not offer this specific policy.
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