Insurance protects your business against the damage or loss of physical assets.
The cost of insurance depends on:
- the insurer's assessment of the likelihood of damage
- the size of payment your insurer may have to make for a claim
Liability and professional indemnity cover
This protects against your legal liability for any damage or harm caused to customers or the public by:
- your business
- your products or services
Your business should consider their exposure to these risks carefully.
Awards for damages can be high and could put smaller companies out of business.
Buildings and contents insurance
You should make sure you're covered for damage to your business premises.
Most standard contracts will insure your premises, fixtures and fittings against:
- disasters, such as fire and flood
Buildings insurance only covers the physical building.
You'll also need separate insurance cover for stock, machinery and other building contents.
You have the choice of either:
- 'replacement as new' insurance
- indemnity insurance
Many business owners choose indemnity cover. This deducts the cost of any wear and tear when settling a claim.
Contents are also covered against theft, but only if there has been forcible and violent entry or exit from your premises.
You can also choose a business interruption policy. This insures against:
- loss of profit
- higher overheads – for example if machinery gets damaged
If you, your employees or anyone else working for your business uses a vehicle for work then you should make sure that:
- all vehicles owned by your business are covered by insurance
- any employees' vehicles used for business have their insurance extended – covering use for their employer's business
- any personal vehicle insurance you have also covers business use
Business insurance if you work from home
If you work from home, you may need a specialist insurance policy.
Household insurance won't cover any loss of office equipment. It also doesn't provide public liability cover.
Cyber liability insurance
Many businesses have insurance to cover computers and mobile devices against theft, loss or breakdown.
But your business might also want to consider taking out 'cyber liability insurance'.
Cyber liability insurance covers your business in the event of:
- lost data
- data protection breaches
You can find more advice on cyber liability insurance on the Get Safe Online website.
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