We are often asked to advise new start-up businesses on the types of insurance policies that areÂ available to them.
We detail below some of the most important and widely used policies that exist. This list is by noÂ means exhaustive and you should be aware that specialist policies/ cover are available to guardÂ against specific risks. You should always consult an insurance broker and check the terms of yourÂ policy very carefully.
1-2 below are compulsory, 3 will no doubt be a requirement by any given landlord of premises orÂ lender and 4 and 5 will be optional:
- Employers Liability – once one employee is taken on you are legally required to take outÂ Employers Liability Insurance. There is a prescribed legal minimum which the insurance companyÂ will make you aware of to cover against bodily injury, illness or disease sustained by someone inÂ the course of employment.
- Public Liability – legal liability insurance to pay damages consequent upon bodily injury,Â illness or disease contracted by any other person, other than employees, or loss of or damage toÂ their property caused by the insured.
- Property and Buildings – buildings and contents can be insured against fire, lightning,Â explosion of gas and boilers without the addition of special perils such as explosion, riot,Â malicious damage, storm, flood, impact by aircraft, road and rail vehicles, escape of water fromÂ tanks or pipes and sprinkler leakage. ‘All risks’ insurance gives wider cover including any accidental damage or loss not specificallyÂ excluded. However ‘all risks’ will not cover wear and tear, electrical or mechanical breakdown andÂ gradual deterioration.The business premises should be insured for their full rebuilding cost (including professionalÂ fees and the cost of site clearance) and not just for their market value.
- Business Interruption – even minor damage to your property could seriously disrupt your businessÂ leading to loss of income and extra expenses. Business interruption insurance will compensate forÂ the short-fall in gross profit together with paying any increased working costs and extraÂ accountantsÂ fees incurred.
- Business assets and equipment (contents cover) – your stock should be insured for its cost priceÂ without profit. Business equipment can be insured on either a ‘replacement as new’ or anÂ ‘indemnity’ basis. If indemnity is chosen, wear and tear will usually be taken into account whenÂ settling any claims.
Contents are usually covered against theft providing there has been forcible and violent entry toÂ or exit from the premises. Damage to the building resulting from theft or attempted theft willÂ also normally be covered.
You can usually get one policy that will cover all of the above.Â