First things first - we need to make sure that you are meeting all of the legal obligations to start your business.
Most businesses, whether you are a sole trader, partnership, or a limited company will have a requirement, or need, for some form of commercial insurance. When we say need, this includes covers that are legally required as well as the covers that a sensible business person will incept.
Business insurance cover is there, in the main, to protect you in the event of a sudden and unforeseen (ie unexpected) loss or damage to your own property or to third parties property.
This will also apply to injuries caused to third party persons or to your own employees. Whilst you have a duty of care to all members of the public and employees alike, employers liability insurance is more strict. What this means is that even if an employee were injured, in the course of their employment, and they contributed to this through their own lack of care, you could still see a significant claim made against your business.
Public Liability Insurance
This falls into two types, There are three standard business liability insurances: employers, public and products, and two specialist covers, professional indemnity and Directors and Officers liability.
Most business will have a requirement for the three standard business ones and all package policies include these covers. Not every business will have a need for PI.
In summary, employers liability is legally required and pays out if an employee (which can be an extremely wide definition) is injured or suffers a disease or illness caused as a result of working for you.
Public liability is when you cause injury (to third party persons) or damage (to third party property). When we say “you” this also includes your employees or anyone acting under your direction.
Product liability is when a product you supply and/or manufacture causes injury or damage, as noted above. It is important to note that there has to be damage. Products liability does not apply to faulty design or workmanship or product recall.
Professional indemnity is where you provide advice, or other professional service, including design, and can be proven negligent. Although there may be physical damage, there does not need to be for a claim to proceed, unlike products and public liability. Usually PI only applies where there has been a financial loss, as a result of the negligent or incorrect advice you provide.
Commercial building insurance including property owners liability.
This type of cover is for the actual structure, usually the fixed glass and sanitary-ware (toilets, sinks, baths and showers), property owners liability, landlords (not tenants) contents and loss of rental income.
Contents, electronic equipment, stock and all other business assets insurance is cover for everything that belongs to the business. As insurance is for sudden and unforeseen losses, you need to think that if everything in your business premises was destroyed, damaged or stolen overnight, how much would it cost to put you back in the same position as you were before the loss?
It is very important, if you do not own the building, that you think about tenants improvements insurance. If you have improved a building, for example by putting in a fitted laminate floor, then you need to make sure that you have the right cover in place. Many business insurance policies do not include tenants improvements under contents. If you need a separate item for this, your broker should make you aware.