NO MATTER HOW big or small your business, it’s essential to protect yourself against legal action which may be brought against you as well as environmental factors which may lead to your business being unable to function as normal. The only mandatory insurance for a business is the Employers’ Liability Insurance, which protects you against the cost of compensation should a member of your staff get injured or ill while working for you. There are, however, a considerable number of non-mandatory insurance packages which you should take time to consider. You can find out more here, but below are some of the most important.
Public Liability Insurance
For roofing contractors, whose work is usually in public places, this is an essential insurance because it provides financial protection should your business activities injure or kill a member of the public or damage their property. It will cover legal costs, compensation, the cost of repairing damage and hospital treatment costs that can be recovered by the NHS. It is usually a requirement of all council or local government contracts.
Often referred to as PI Insurance, this insurance provides cover in the event that your service, advice or design has caused your client to lose money or has damaged their reputation in some way. So, for example, if your advice about how to undertake a job turns out to be wrong in some unforeseen way, this policy will provide protection from thousands of pounds worth of legal fees, compensation and lost income from time spent defending the allegation.
Business Interruption Insurance
This insurance covers loss of income resulting from a disaster, such as fire or flood. Property Insurance covers the cost of damage to the fabric of the building, but Business Interruption Insurance provides compensation for the loss of profits which would have been earned. It also covers the costs of any necessary relocation. Business interruption is an often-overlooked area of business risk and it is only after the event that the full impact of a disaster becomes apparent.
Commercial Buildings and Contents Insurance
This insurance provides financial protection should the fabric of the building be damaged by flood, fire, riots, storms, subsidence, burst pipes or theft. The ‘contents’ part of the policy will cover the cost of replacing stock and equipment. If you have a mortgage on your property this insurance will usually be mandatory.
Credit Risk Insurance
This insurance provides financial cover in the event of non-payment by debtors. The level of cover provided will be determined by the premium.
Key Person Insurance
If someone who is essential to the running of your business can no longer work for you, this insurance will provide financial compensation for the loss of income that your business may incur while you seek a replacement. Clearly money is no substitute for loss of crucial expertise, but it can go some way to mitigating the unexpected loss of a key person from your business.