Insuring Your Small Business

Business can be unpredictable. Picking the right business insurance can help protect against unforeseen calamities and hedge business owners against those dreaded worst-case-scenarios in the unlikely event that they ever happen.

However, choosing the right business insurance can be tricky and confusing, with numerous companies all offering a raft of different policy types. Here are some of the major types of policy and protection available for your business:

• Are you an employer? If you hire people within your business – whether full time employees or part time/contractors you must take out Employer’s Liability Insurance. This isn’t a choice – it’s a legal requirement. Employer’s Liability Insurance will protect you and your business against any legal action that your employees may take against you. This can happen for example when an employee hurts themselves on your premises.

• Protect yourself against accidents at your premises. Another type of cover is known as Public Liability Insurance, which protects a business owner against accidents that happen to customers or visitors on their premises. An example of this might be a small grocery shop which has a loose ledge – if the ledge collapses and hurts a customer, that customer could sue for compensation. Public Liability Insurance can help protect the business owner against such claims.

• Is your business a consultancy? If your business provides any type of service or consulting work – you may benefit from professional indemnity insurance. This protects you against any losses that may be suffered by your clients due to negligence on your part.

• General protection. You never know when a disaster might strike. Floods, theft and many other things could severely damage your business – having the right insurance policy will ensure that the loss does not end up crippling your business.
Here are some considerations to think about when researching and choosing your business insurance policy:

• Determine exactly what needs to be covered. This is important – being under insured is a risk, but having excessive coverage that you don’t need is just an added and futile expense. Only by analyzing your business, it’s risks and what should be insured can you choose a suitable business insurance policy.

• Do your business contracts stipulate any minimum insurance coverage? Depending on your business, and your clients – some contracts may oblige the business to have a minimum insurance coverage. Check your contracts for this.

• Do you need business interruption cover? Business interruption coverage compensates the business owner when their business is disrupted due to any unexpected event. For example, if your property or key equipment is stolen or otherwise damaged causing business to be lost – interruption cover can compensate you for lost business, and provide the funds needed to fix or replace the damaged property.

• Research a few policies before making a choice. Once you know the type of coverage you want, it’s time to start researching suitable policies. Price shouldn’t always be the only determining factor.

Ultimately, choosing a comprehensive level of insurance for your business provides many positives – and aside from protecting your business against a notoriously unthinkable disaster, it also provides peace of mind and demonstrates to your clients that you’re running a serious and credible operation.