Here at Specialist4Business, we regularly receive questions about business insurance.
We’d like to share some of those below and provide some answers.
What is business insurance?
It is one or more types of cover specifically designed for businesses.
The exact details of what’s included in a typical business insurance policy may vary depending upon the circumstances and requirements of the business concerned.
What cover might be included?
Typically such policies might comprise one or more of the following:
- business premises insurance;
- business assets cover (covering things such as your equipment and perhaps stock);
- employers’ liability insurance;
- public liability cover;
- professional indemnity cover (in some cases, typically involving professionals offering services and advice/guidance etc. Doctors and pharmacists might be two such examples);
- business interruption cover (should you be unable to operate your business due to an insured peril – e.g. being unable to trade while repairs were underway following a fire).
Many other forms of cover might also be included, as your needs dictate.
Why do I need business premises insurance if the property isn’t mine and only rented?
It’s probably true that the owner of your property has their own property insurance. That might cover them against the risks of say subsidence or storm damage.
However, your activities in the property might result in damage to it. An example might include a fire started due to one of your machines overheating.
In those circumstances, you might have a legal liability for any damage you cause to the owner’s property. That’s why cover exists though it’s exact terms and provisions will vary depending upon whether or not you’re the property’s owner.
What’s the difference between public liability and professional liability?
The limited space here doesn’t permit a full legal discussion but in highly summarised terms:
- if a customer or other visitor (or indeed a passer-by) is injured as a result of your property or activities, they may have the legal right to sue you for compensation. The classic example here is someone who enters your business premises, only to slip on a patch of damp, injuring themselves in the process.
That would be an example of where you might need the help of public liability insurance to help meet any court awards against you;
- if you provide professional advice (or sometimes treatment) that results in injury to someone or financial loss, they may be able to sue you for effectively professional negligence or incompetence. An example might be the collapse of part of a building following inaccurate architectural advice and a subsequent court case.
The laws here are complex but this is essentially the domain of professional liability insurance.
Would this insurance cover business debts should the business fail?
There are specialised insurance products that can help cover things such as your loans and income against a range of risks, such as personal accidents and serious illness.
These are not normally considered to be part of typical business insurance but some of them may be able to be incorporated into a total package. Please discuss these with us to find out more.
Commercial viability insurance is more complicated again, and is usually discussed as part of business financing, such as looking for venture capital or business angel support. Once again, this would not normally be seen as part of typical standard business insurance.