According to official European statistics, there are some 1.7 million small and medium sized enterprises in the UK, accounting for 17.7 million of the working population and representing no less than 99.7% of all businesses in the economy, and a vast majority require some form of business insurance.
Not only do these figures convey the considerable economic importance of SMEs, they also illustrate the incredible range of different types of business – including independent professionals, self-employed tradesmen, shop keepers, beauticians and salon owners, restauranteurs, bar and takeaway owners, the list is almost endless.
What each one of these businesses needs – to protect both the assets it owns and the liabilities to which it may be exposed – is a form of business insurance relevant to that particular line of business.
We have published a detailed guide about business insurance, but let’s recap what you are likely to need and what is likely to be covered by the typical business insurance policy:
- the assets owned by any particular business may vary greatly – some own their premises, for example, whilst others lease;
- if you are an owner, an important element of your business insurance is likely to be building insurance to protect the premises against major risks such as fire, flooding, storm damage and the like;
- whether you own or lease, the premises are likely to house a valuable array of equipment, tools and machinery, work in progress and stock;
Home business insurance
- many small businesses may be conducted from your own home – when special provision needs to be made for your business insurance;
- at GSI Insurance we are also able to arrange insurance for your home business and you might want to consider a suggestion made by Startups that you combine your home business policy with a home insurance policy;
- some of the fundamental and most valuable protections offered by business insurance relate to the many and varied liabilities faced by your enterprise;
- any business, for example, is at risk of a public liability claim if a customer, supplier, visitor to your premises, a neighbour, or even a passing member of the public is injured or has their property damaged in any way connected with your business;
- claims may reach substantial figures and it is usual for your main line of defence – public liability insurance – to provide indemnity of at least £1 million;
- if you are in the business of providing professional services or advice, you may also need the protection of professional indemnity insurance, which offers a defence against claims of professional negligence;
- in some professions – notably, lawyers, accountants and architects – professional indemnity insurance is a condition of your membership of the relevant professional body;
Directors’ and officers’ liability insurance
- directors and officers of any business have specific duties and responsibilities and a failure to discharge those obligations correctly may lead to claims from investors, shareholders, regulators, employees or third parties, advises the Association of British Insurers (ABI);
- directors’ and officers’ insurance – commonly known as D&O insurance – provides indemnity against such claims;
Employers’ liability insurance
- if you employ others to help run your business, one element of insurance you are unable to avoid is employers’ liability insurance – except in a few rare cases, you have a legal obligation to hold a minimum of £5 million of this cover;
- employers’ liability insurance is designed to ensure that your business meets any claims from present or past employees who may have been injured or have contracted a medical condition through their work for you.
Clearly, business insurance is an involved and potentially complicated subject for which you might want the assistance of a specialist provider such as ourselves.