Handling insurance is an overwhelming yet the most important task for your small business. What kind of insurance do you need as a small business owner? What are the policies? How do you pick the right policies? Here is an essential guide that has answers to all your questions.
What does business insurance cover?
As a new business owner, you need to understand why getting insurance is important for your small startup. The four main types of insurance that will cover different aspects are employer’s liability, product liability insurance, professional indemnity insurance, building and contents insurance, etc.
What is a small business employee liability insurance?
As an employer, you must care for your employees and their well-being. You can call it compulsory insurance that is required by law.
You are responsible for the health and safety of your employees at work. You can get employee liability insurance and compensate the dues if any if your staff member gets ill or injured while working for your company. Further, the cost of defending and settling claims in case of any injury or health issues for past and present employees will be covered by employee liability insurance.
In the United Kingdom, it is a legal obligation/requirement for you to get employee liability insurance even if your business has a single employee. If you do not fulfill the legal requirement, you can be charged a fine of up to £2,500 for each day you did not have insurance.
What is public and product liability insurance for a small business?
If any of your products or service causes harm to anyone or a consumer or public claims your company, this insurance will cover you. All the damage and any legal fee in both matters will be covered by public/product liability insurance.
What is covered by professional indemnity insurance for small businesses?
If you run a consulting company or are a professional, this insurance is what you need. If you are offering a service or advice that causes harm to your client or is the reason for your client to lose money or contract, then professional indemnity insurance will cover the loss. Professional indemnity cover starts from £50,000.
What are the insurance factors?
Every business needs a different type of insurance determined by the insurance essentials. Some of these are:
Your business operation sector
Your business turnover
Number of employees in your company
Does your business have any kind of public dealing
How can you determine policies for your business insurance?
You can find out what type of policies and covers you require through the insurance. Your accountants and advisers can determine that by looking deep into different circumstances of your business. Accountants can help you bring up the insurance costs and weigh down the risks so that you can make an informed decision about what type of insurance is required for your company.
What is the cost of small business insurance?
Small business insurance can cost you thousands of pounds per year. However, there are certain factors that help in determining the insurance cost for your business.
How many policies do you plan to buy?
What coverage level do you want from each policy?
Risks and potential benefits associated with your business.
Your history of business insurance claims.