FAQs - Business insurance

There is a balance between adequate and appropriate protection of the business whilst keeping initial costs to a minimum.  Evaluate your business risks and the need for insurance under these 4 headings:

• Assets (both physical and intellectual);
• Revenue streams;
• Liabilities to Third Parties (including contractual obligations);
• People (your staff including their importance to the business).

Usually, a package type policy covering your physical property, annual revenues, Employer’s liability and Public/Product’s liability is required.   The only insurances required by law are Employer’s Liability, Motor Liability (if you have cars/vans etc) and Engineering Inspection of lifting and pressure plant if you have them.

If you work in one of the professions for whom Professional Indemnity insurance is a legal requirement, the amount of cover you need may be mandated by your regulatory body. You should check on their website to find out.

Your clients may also specify within their contract the amount of PI cover they require you to have in place to protect the work you do for them.

If the amount of cover you need is not pre-determined, you can work it out by thinking about the size of projects you work on and your potential exposure to risk. We can help you calculate what this might be. Our recommendation would be to buy as much cover as you can afford.

If your business provides advice, professional services or creates designs, it makes sense to have Professional Indemnity insurance to protect you in case anything goes wrong.

For some professions it’s a legal requirement to have Professional Indemnity insurance in place. Professions for whom it is mandatory include:

• Solicitors and barristers
• Financial advisers
• Architects
• Accountants
• Some healthcare professionals, such as doctors, vets, dentists and surgeons
• Chartered surveyors

PI insurance protects your business if a client claims the advice, service or designs you provided were faulty in some way. It will cover the cost of any claim for compensation.

Also called D&O insurance, this covers the cost of any compensation claims your business needs to pay if a director or key manager is alleged to have done something wrong during the course of their work. This might include negligence, breach of trust, making a mistake or failing to do a task.