INSURANCE
Protect and survive
No matter what line your business might be in, whether small or large, there’s one thing that’s likely to connect them all: insurance.
From protection for your employees to providing reassurance against everyday risks, mistakes or damage, there’s a range of insurance products to help should your business suffer an unforeseen knock.
Protect your business
First and foremost, as soon as your business employs anyone other than yourself then employer’s liability insurance is a legal must. This will cover the cost of compensation to employees who might have been injured or become ill as a consequence of the work they do for you.
Top tip: make sure your employer’s liability insurance covers any casual or seasonal staff and work placements as well as conventional employees.
If your business means dealing directly with customers or the general public then public liability insurance can be essential.
Although not a legal obligation like employer’s liability insurance, it’s worth bearing in mind that you still have legal responsibilities should a member of public be injured or if the business has done something wrong.
Public liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business. This could mean someone who fell and hurt themselves while in your shop, or if property was damaged at an event off-site organised by your business.
Remember public liability insurance also usually covers the legal costs should you be pursued for compensation, without it this could be very expensive.
There are also other lines of liability insurance to note. Firstly, if your business provides an expert service (such as designs or calculations) or offers advice and consultancy work, professional indemnity insurance can be particularly useful. It provides cover for compensating clients should any loss or damage arise as a result of the services provided.
Similarly, if you’re in the business of manufacturing goods then product liability insurance can cover the cost of compensation should a faulty product that you are responsible for cause an injury.
Cyber insurance is also becoming increasingly important for businesses. Cyber insurance covers losses resulting from a digital attack that damages your IT systems and networks or causes you to lose information.
Policies generally include significant assistance with and management of the incident itself, which can be essential when faced with reputational damage or regulatory enforcement. If you hold customer data it is also possible to get cover should customers seek to claim compensation from you for losses they may suffer as a result.
Insurance can also provide a safety net for financial risks, such as customers with bad debts.
Trade credit insurance provides cover for businesses if customers who owe money for products or services don’t pay their debts, or pay them later than the agreed payment terms.
In 2019, ABI members alone supported business turnover worth over £366bn through the provision of trade credit insurance. There are many different kinds of trade credit insurance depending on the needs of the business.
If it’s something you’re considering, specialist credit insurance brokers can help you take out the most appropriate policy for your needs at the best price.
Protect your employees
Employees are an invaluable asset to every business, and there are various insurance products that will help provide financial security and medical assistance for you and your employees.
Group life cover might be something you wish to consider taking out to provide life insurance cover for your staff. The business will agree the level of cover with the insurance cover and pay the premium on behalf of employees. If a colleague should die whilst employed by your organisation, a lump sum will be paid out to their family or next of kin.
Income protection insurance and private medical insurance are also other examples of products which businesses might choose to take out on behalf of their staff. The former provides a monthly income to an employee who might be unable to work for a prolonged period of time due to illness or injury, whilst the latter covers the cost of private medical care allowing staff to receive treatment quickly.
Health cash plans can also cover fees for eye tests, dental care and physiotherapy.
It’s worth noting that since April 2020, it became law for all businesses to provide staff with the terms of their employment no later than their first day of work. Also known as a ‘day one statement’, it could also cover a range of areas that show employees the variety of benefits and support you offer.
More information and a template you can download to help you quickly build the statement can be found on our website at www.abi.org.uk
Taking out insurance?
There can be many decisions to navigate as you start up a new business but there’s a wealth of information available to support you on the key insurance matters.
As a starting point, more detailed information can be found at www.abi.org.uk/products-and-issues.
Mark Shepherd, ABI Assistant Director, Head of General Insurance Policy.
