Business Insurance FAQs

Why does a business require insurance?

Business insurance protects corporations, shops, restaurants, independent tradesmen and many other commercial entities against financial losses. Business insurance protects your employees, your financial assets, your premises and the goods, tools or equipment that allow you to earn revenue. In addition, business insurance learning centre may protect your revenue itself in the event of an interruption.

Which types of insurance are required by law for all businesses?

All businesses in the UK that employ at least 1 person must carry employer's liability insurance to cover claims made by employees who suffer physical injuries or illness due to conditions in the work place. Only health services organisations, local authorities, publicly financed agencies and businesses that employ only immediate family members are exempt. In addition, commercial vehicle insurance is legally required if your business operates cars, vans, scooters or other motor vehicles in the course of its operations.

How can I insure my business against customer claims?

Public liability insurance protects businesses against claims made by customers, vendors or visitors who declare that they were injured or suffered losses due to your company's actions or conditions on your premises. Many public liability claims are made by customers who are injured as a result of an accident, such as slipping on spilled liquids. In the event of a claim, a public liability policy pays out to protect your company against damages and legal expenses.

Which type of insurance protects doctors, attorneys and other professionals?

Professional indemnity cover insures highly trained professionals, such as physicians, attorneys, architects, accountants and engineers, against claims of negligence. Professionals who provide advice to patients or clients for a living are required to carry this form of business insurance. A professional indemnity policy covers legal expenses and damages to clients who claim they suffered injuries or losses as a result of advice you provided or failed to provide, or design solutions that proved to be faulty.

Which type of business insurance should restaurants, pubs and bars carry?

Restaurants, pubs, nightclubs and other establishments with a high volume of customer traffic should consider dedicated liability policies that address the risks these businesses face. Public liability protection is essential for businesses that serve alcoholic beverages to customers, as the use of alcohol can impair judgment and increase the risk of injuries or property damage. Liquor licence protection, stock protection, coverage for signage and awnings may also be included in a tailored policy for public houses.

Which type of business insurance do shopkeepers need?

Shops, boutiques and other businesses that sell goods to the public require public liability policies to insure their assets. Business building insurance protects the shop itself against damages. Optional cover to protect stock, shop displays, goods in transit and other aspects of operating a shop or market can provide additional financial security.

Which type of insurance do independent tradesmen require?

Independent tradesmen, including construction workers, plumbers and electricians, may benefit from a tailored policy that addresses the liabilities they face on job sites and in the course of their work. Public liability protection is a must to cover the potential injuries or losses that may occur on a construction site or in the course of a residential repair. Optional tool and equipment cover protects a tradesman's valuable sources of revenue.

How can I insure my company's building and its contents?

Business building insurance protects the premises that your company owns against fire, vandalism, water escape, forced-entry theft or other common hazards. The structural elements of your building, including walls and floors, are covered by a building policy, whilst the furnishings, equipment, computers and other movable assets are covered by business contents protection. A company that rents its premises may require only business contents insurance.

How can I insure the vehicles my company operates?

Commercial vehicle insurance is legally required by all businesses that use motorised vehicles in the course of their operations. For businesses that operate a fleet of vans or cars, business fleet insurance policy may increase the value of commercial vehicle cover by including comprehensive protection against accidental damages, fire or theft. Breakdown assistance and courtesy cars are optional add-ons to a business fleet insurance policy.

How can I insure my company against the cost of interruptions?

Business interruption insurance protects your revenue in circumstances that prevent your company from continuing its normal operations. A disaster such as a flood or fire, an interruption in the supply chain, loss of key personnel or a breach of electronic security can halt your daily work processes. Business interruption insurance ensures that your company won't suffer debilitating financial losses as the result of an interruption.

How much does business insurance cost?

The cost of insuring a business depends on a number of factors, including the size of your staff, the nature of your work, the risks you encounter in your daily operations and the location of your premises. In general, larger companies and businesses that involve a high risk of injury or property loss have higher rates than small companies that encounter few risks during their daily routines. For instance, a large machine shop would have higher rates than a small designer boutique.

How can my business reduce the cost of insurance?

Preventing claims is one of the most effective ways to minimise the cost of business insurance. Maintaining basic safety and security precautions, implementing safety training for new employees and installing high performance locks and alarms on the doors and windows of your building will help you avoid incidents and claims. Insurance companies may reduce your premiums if your company has a comprehensive business continuity plan in place. Combining several necessary covers in a single, tailored policy -- such as public liability protection, building insurance and stock cover -- may lower the cost of business insurance considerably.

What is a business continuity plan?

A business continuity plan describes your company's strategies for coping with a disaster, the loss of a key employee, an interruption in the supply chain or another occurrence that could interrupt your operations. A continuity plan gives management and staff the necessary guidelines for responding to an emergency, so that interruptions and losses will be minimised. A business insurance company may help its clients develop a business continuity plan or offer a discount if the company has an up-to-date plan in place.

How can my company apply for business insurance?

Consult a broker or insurance provider that is authorised by the Financial Services Authority, or FSA, an independent agency that protects consumers against fraud. Many companies allow you to apply for business insurance online. Before you select a policy, compare quotes from several trusted, FSA-regulated providers on a tailored policy that addresses the unique needs and risks of your business.