Business Insurance Requirements

Business insurance policies provide coverage against risks that are related to your business.

Business insurance policies provide coverage against risks that are related to your business. Your insurance provider will charge a certain premium for the risk they will undertake to cover your business against certain perils. The premium is calculated based on the control mechanism you employ in your business, which potentially lower the undertaken risk and the level of compensation the insurer has to reimburse should a damage occur. Whatsoever, it is in your best interest to purchase adequate business insurance to cover for any hazards that may cause minor or irreversible damages to your business.


Types of Business Insurance


a) Commercial Property Insurance
Commercial property insurance provides coverage for unanticipated damages to a business building and assets, including equipment, machinery, furniture, computers, inventory, supplies, vehicles, and money. This type of business insurance includes all-risk policies, which cover against damages of fire, storm, civil rebellion and vandalism, and peril-specific policies, which cover against damages of tornado, earthquake, flood or crime. Typically, peril-specific policies are purchased to cover for businesses, which are located in high risk areas.


b) Liability Insurance
To avoid being sued for negligence or malpractice at a workplace that may lead to an accident or injury, it is advisable to purchase liability insurance. Professional liability insurance covers against damages caused out of negligence and protects your professional reputation. In particular, if you are a product manufacturer, you should purchase product liability insurance to be covered in case a faulty product causes any sort of damage to a third party.


c) Workers Compensation Insurance
Workers Compensation Insurance covers against injuries at the workplace. If the injury is serious, as a business owner, you will be required to pay for huge medical expenses and possible cover the cost of a permanent disability claim. A workers compensation insurance helps you anticipate a large compensation claim following an accident on the job. However, because you pay for a workers compensation insurance, the employee has no right to sue you should an injury occur at the workplace.


d) Business Interruption Insurance
Business interruption insurance covers the loss of income due to a temporary interruption of business. Should operations be ceased as a result of a machine breakdown, the cost of repairing the machine will be covered by commercial property insurance, but the loss of profit will be compensated by business interruption insurance.


e) Casualty Insurance
Casualty insurance provides coverage for a worker's injury on the job and covers both for damages incurred to the property and to people. For example, if a burglary takes place on the job and an employee gets injured, the insurer covers for the employee's medical expenses as well as for the damages on the assets.


f) Commercial Vehicle Insurance
Commercial vehicle insurance covers against liabilities on the business vehicles and property damages caused by third parties.


Shopping around for Business Insurance


Shopping around for business insurance will allow to get the best quote out of a wide variety of insurers who offer different policies for different perils. The first thing you should do to ensure you purchase the right insurance to match your business needs is to assess your business risks and liabilities. When you know what your needs are, shop around and compare the different quotes and policies. Let the different providers know you are doing a comparison between different providers as competition is harsh and each provider would want to gain the deal.


UK Legislation for Business Insurance


According to the Employers' Liability Compulsory Insurance (ECLI) Act 1969, insurance against liability for employees in the UK is compulsory under one or more policies to cover for bodily injury or disease arising out of and in the course of employment in the UK and in the particular business. Regulations of each policy may provide the specific amount of coverage for which each employee should be covered by the Employers' Liability Act. The insurance coverage should be purchased and maintained either as a general provision or individually as indicated by the particular regulations in the policy. As a business owner, you are required to post details of the insurance policy somewhere where the employees can see it and get informed about the coverage. Exemptions are the public organizations and smaller companies.


In conclusion, purchasing business insurance guarantees better protection for your company's building and assets should any unforeseen peril occur and cause serious damages. In today's competitive business environment, you cannot afford to lose any income or compensate your employees for huge medical expenses as a result of an injury on the job. It is in your best interest to purchase a business insurance policy depending on your company's specific risks and liabilities and enjoy all the benefits of your insurance coverage for an affordable premium.


Resources


Find Insurance Companies
Employers' Liability (Compulsory Insurance) Act 1969



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