If you are starting up a new business, it is crucial that you consider a suitable insurance policy.
Below is a general list of the policies available, though it is by no means an exhaustive list:
1. Employers Liability.
As soon as you employ one person you are legally required to take out Employers Liability Insurance. There is a prescribed legal minimum which the insurance company will advise you on to cover against bodily injury, illness or disease sustained by someone in the course of employment.
2. Public Liability.
This is legal liability insurance to pay damages consequent upon bodily injury, illness or disease contracted by any other person who is not an employee. It also provides cover for loss of or damage to a third party’s property caused by the insured.
Usually required by the landlord and/or the lender:
3. Property and Buildings.
Buildings and contents can cover against fire, lightning, explosion of gas and boilers. Additional perils can be covered such as explosion, riot, malicious damage, storm, flood, impact by aircraft, road and rail vehicles, escape of water from tanks or pipes and sprinkler leakage.
It is worth considering ‘All risks’ insurance as this gives wider cover including any accidental damage or loss not specifically excluded. However ‘all risks’ will not cover wear and tear, electrical or mechanical breakdown and gradual deterioration.
The business premises should be insured for their full rebuilding cost (including professional fees and the cost of site clearance) and not just for their market value.
4. Business Interruption.
Even minor damage to your property could seriously disrupt your business leading to loss of income and extra expenses. Business interruption insurance will compensate for the short-fall in gross profit together with paying any increased working costs and extra accountants’ fees incurred.
5. Business assets and equipment (contents cover).
Stock should be insured for its cost price without profit. Business equipment can be insured on either a ‘replacement as new’ or an ‘indemnity’ basis. If indemnity is chosen, wear and tear will usually be taken into account when settling any claims.
Contents are usually covered against theft providing there has been forcible and violent entry to or exit from the premises. Damage to the building resulting from theft or attempted theft will also normally be covered.
Please note that one policy that will cover all of the above should also be available.
Other points to note
Specialist policies are available to guard against specific risks. You should always consult an insurance broker and always check the terms of your policy very carefully without fail!