Company Insurance – What does a Small Business need?

November 23rd, 2017

managed office rental, small business insuranceBusiness is something that all small businesses need to consider, as disaster can strike at any time. Even if you think it is an expense you can ill afford when you start your own business, it is essential to make sure that you don’t neglect your insurance needs.

Regardless of the size or industry, running any business comes with inherent risks, but having the right cover in place will give you peace of mind.
All companies face a number of risks. An employee could get injured at work, a natural disaster such as a flood or strong wind could damage property, or a dissatisfied client could take legal action. Ensuring that you are adequately covered, to mitigate the risk of unforeseen damage, could mean the difference between protecting your assets or paying thousands and maybe even going out of business altogether.

Whilst some insurances are compulsory, others will depend on the type of business you are running.  In this article we talk you through the main types of insurance required by a small business and where they apply.

Insure Yourself Against Claims from the Public

Public Liability Insurance is one of the most common types of business insurance and is essential for any company that interacts with the general public.

In the unlikely event that you or an employee causes damage to property or accidentally injures someone, Public Liability Insurance is designed to cover you for any resulting legal fees or compensation claims.

The level of cover you take out is dependent on your business, and the possible extent of compensation claim if something went wrong.  Most insurers will offer between £1 million and £10 million, so when choosing your cover be sure to think about the possible size of potential claims and if your clients expect you to have a certain level of cover in place.  You should also bear in mind that claims can take account of lost income and/or medical costs.

Protect Against Employee Claims

In accordance with the Employers’ Liability Insurance Act 1969, every business in the UK that employs one or more member of staff is required by law to have Employers Liability Insurance, regardless of what your business does.

This insurance covers a business if an employee who is injured or becomes ill as a result of their work for the company, makes a claim for compensation.

The minimum level of cover for an Employers’ Liability Insurance policy is £5 million, although many businesses take out a higher level of cover, with £10 million a more common figure even for relatively small companies.

Safeguard the Advice You Give

If your business involves providing advice to clients based on your skills or knowledge, then you should consider taking out a Professional Indemnity Insurance policy.  This type of cover is applicable to professionals such as accountants, financial advisors, marketing consultants and solicitors. Whilst it is not mandatory, many businesses will require some degree of professional indemnity cover to win a contract in the first place.

Regardless of how much experience you have, mistakes can happen.  Professional indemnity insurance will protect you from legal action taken against you over allegations of inadequate advice, professional negligence (for example, making a mistake in a piece of work for a client), loss of documents or data, unintentional breach of copyright and/or confidentiality, defamation and libel and loss of goods or money.

Buildings Insurance

As with insuring your home, you will need to make sure that the premises where you run your business from and its contents, are adequately insured. As with most other insurance policies, the level of cover required will depend on the type of business that you are running. Consideration should be given to how much it would cost to rebuild, repair or replace items should they be damaged or worse still destroyed.

However, if you are running a small business, then a managed office rental could solve the issue of buildings insurance. A managed office will offer you a multitude of benefits including insurance, buildings maintenance, and a high-quality furnished environment in a flexible monthly rental fee.

Basepoint Business Centres provide managed office rentals in over 30 locations throughout the UK, including Evesham, Ipswich, Southampton and Swindon. Our licensees benefit from buildings insurance, so this is something you don’t need to worry about.  As a licensee, if you need advice on any of the additional types of insurance you might require, you can speak to the office managers, and also to experienced business mentors via our Mibase service.