Types Of Small Business Insurance: What You Need To Know

Small Business Insurance — By admin on February 5, 2010 at 8:09 am

Small business insurance can often be overlooked by entrepreneurs. Some start-ups consider insurance cover an unnecessary expense. However, any small business owner should look upon insurance as a vital item of protection for your company.

It’s little wonder most start-ups are so confused about insurance. Small business insurance is a broad subject so it can be difficult to know where to begin when searching which small business insurance policy is right for your company. It is helpful to remember that all policies will pertain to the following there areas of risk:

• Liabilities (Public Liability Insurance, Employers Liability Insurance etc)
• Property and buildings
• Business assets and equipment (contents cover)

It’s useful to look at those broad topics as a framework for understanding which insurance policies you are likely to need for your business. By indentifying the risks to your business you have a much better chance of purchasing the right cover for your organisation.

While you will need to select the right policy to suit your business, you should also be aware of the fact that you are obliged by law to take out certain insurance policies.

Listed below are the types of small business insurance you may need depending on circumstances.

Employers Liability Insurance

Employers Liability insurance covers the cost of any damages or legal fees for any employee who is injured or ill through the fault of the employer. You are legally required to take out an Employers Liability Insurance policy if you employ more than one person in your organisation.

Public Liability Insurance

If you are likely to come into contact with the general public then Public Liability Insurance will cover a business from the risk of causing injury or harm to the person or property of a third party.

Product Liability Insurance

Product Liability Insurance will cover your business against any damages caused to a third party (this can be either a person or a property). If you export goods or supplies then this is an insurance policy that your company should consider.

Professional Indemnity Insurance

Professional Indemnity Insurance covers the claims and legal costs for a third party if there has been any negligence or mistakes made in relation to one of the services provided by your business.

Key Man Insurance

Key Man insurance will cover you against losing a key person in your company as a result of critical illness or death. The payout will often be set in advance and will be an approximate estimate of the financial loss to your business if you lose a key member.

Business Interruption Insurance

Business Interruption Insurance will cover your business in the event of any disaster or continuity arrangement. The business will take out this cover and be able to restore the business to the operating levels before the disaster strikes.

Commercial Vehicle Insurance

Commercial Vehicle Insurance is another mandatory legal requirement if you have any vehicle belonging to the business. There are many different types of Commercial Vehicle Insurance including van insurance and temporary car insurance.

Property and Buildings

Most general policies will cover premises belonging to the business for the following areas of risk: fire and lightning, explosion, riot, malicious damage, storms, floods, and damage caused by vehicles.

Business Contents Insurance

While the Property and Buildings insurance will only usually cover the actual premises of a business, you will need separate cover to insure the contents and stock of your business. If you need to cover the actual contents of your building then you need to take out a Business Contents Insurance policy.