Business Insurance Advice… What is Business Insurance?
Business Insurance is a form of protection for a business that can protect you from losses and disasters that could occur during the course of conducting business, this is calculated by the various risks to your business i.e. a local tradesman might simply gain coverage for basic risks associated with the business whereas a large scale business producer of Fire Suppression Equipment using specialist chemicals would require a far larger assessment of risk to the business and public seeking specialist Business Insurance Advice.
Financial expose should be heavily considered by business owners as this will be very personal for them, a full assessment of risks and information on the business which business owners intimately know will dictate what types of covers and protection should be applied.
Business insurance requirements within the UK
Does Your Business Deal with Third Parties?
If your business deals with Clients/Customers, Suppliers and members of the public in any form then ensure that you are covered with Public Liability Insurance
Do you Advise people or Offer Services to Clients?
Handling client data or offering advice is a very wide open field for errors to occur as some times with the most skillful person in place things just might not go right, that bit of advice you gave, that service you provided that went wrong…. Personal Indemnity Insurance is very advised
It’s not about who pays who, it’s about who told you to do that..
All businesses in the UK with at least one employee or more is required by law to have Employer’s Liability insurance.
In the event that your employee(s) becomes ill or has an accident at work, the insurance will cover the cost of the legal fees and possible compensation if pursued. It is important to remember that previous employees can also come forward, as some illnesses develop over time. If the employee feels they became ill due to working conditions or negligence in your workplace, they are entitled to come forward even years after they were employed by your business. In these scenarios, it’s vital that you keep all employee records on file. If you do not have the right insurance, you can also be fined up to £2,500 per day, however there are certain types of business that are exempt from taking out Employers Liability Insurance.
According to the HSE Employers’ Liability (Compulsory Insurance) Act 1969, exemptions to Employers Liability Insurance include:
- most public organisations including government departments and agencies, local authorities, police authorities and nationalised industries;
- health service bodies, including National Health Service trusts, health authorities, primary care trusts and Scottish health boards;
- some other organisations which are financed through public funds, such as passenger transport executives and magistrates’ courts committees;
- family businesses, ie if all of your employees are closely related to you (as husband, wife, civil partner, father, mother, grandfather, grandmother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother or half-sister). However, this exemption does not apply to family businesses which are incorporated as limited companies;
- companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company.
Well the driver thought the lorry would go under the bridge…
A great piece of Business Insurance Advice is if your business uses motor vehicles, then you are required to have at least Third Party Motor Insurance. In the event that someone is injured as a result of a collision caused by an employee or yourself, including damaged property, the motor insurance covers the cost of paying their claim. The law states that you must cover a minimum of £1million for property damage and an unlimited amount for personal injury. The difference between Third Party, Fire and Theft, and Comprehensive can be quite significant so it’s also important to make sure you get the correct type for your business.
“The full cost of an accident might be between £8 and £36 for every £1 your pay on your insurance claim” (Source: Health & Safety Executive)
How Business Insurance Is Calculated
Without business insurance or good Business Insurance Advice, you could end up forking out for those accidents, injuries and law suits – risking your business and personal finances. So it’s clear that to protect your business, insurance is absolutely vital to it’s survival. But how is it calculated? It’s a question many business owners have the right to ask, so here are a few pointers on the process:
Depending on your industry, some premiums may be higher than others, for example if you work in the retail industry, your premiums may well be lower than that of someone running a construction business.
Type of Policies required:
Understandably, there is no ‘one fits all’ when it comes to business insurance, and quite rightly so. Your business requires insurance that will directly help your business in it’s time of need, which will also impact the types of policies required. Some policies naturally will be more costly due to their nature, so it’s important to know what policies are right for your business.
Types and amount of risk:
Looking at the work you do, the people you come into contact with, and the effect your business has on its consumers are all factors when looking at the risk involved. Heavy machinery and equipment will generally be more costly to insure than a small toolbox, so be aware that the equipment you use and products/services you deliver will all have an impact on the cost of your premium.
The size of the business
This includes the number of employees as well as the premises. The number of employees you have directly indicates how much your employer’s liability might cost.
Location of the business
A restaurant in a high-risk flooding postcode or a shop in a high crime area can impact the cost of your insurance.
The number of claims you have historically made:
If you have had numerous claims in the past, then your insurance premium will be higher than before due to your business being seen as ‘risk-prone’
Size of Excess
Having a higher excess will normally lower your premium, however it’s important to note that this will mean you will have more to pay if you make a claim.
Your companies worth:
The more your company is worth, the more you can potentially lose, which taken into consideration when pricing your insurance premiums.
Business Insurance Disasters
Here are some of the recent disasters within the UK highlighting just how unique situations can develop from in some cases completely unexpected sources.
9th April 2015 – Holburn Fire (Full Article)
In the busy area of Holburn, a fault in a Victorian Tunnel started a 36 hour blaze which lead to members of the public fleeing for safety and over 5,000 people being evacuated. During the blaze, eight theatres were forced to cancel performances and numerous restaurants had to close their doors – a scenario where having your business interruption insurance in following well placed Business Insurance Advice would be of the utmost importance.
Mr Dobson, the London Fire Commissioner said: “If the fire had not been put out before it was isolated it could have resulted in a build-up of gas over a wide area leading to possible explosions.” The heat from the flames of the fire caused the 100 year old tunnels to almost cave in, taking weeks to repair and great patience from locals businesses trying to work around the recovery process.
28th March 2016 – Storm Katie (Full Article)
With gusts of up to 106mph hitting the south of the UK, Storm Katie battered large parts of England, leaving flights cancelled, property damaged and businesses left picking up the pieces. The Environment Agency issued 20 flood warnings and about 120 alerts across England, with high winds damaging power lines and leaving thousands without power.
The weather was that bad Even the birds flew indoors to escape the rain at Wymondham Abbey duck race. The devastation left behind after Storm Katie was seen across the country with cranes keeling over, pubs losing their roofs and scaffolding collapsing onto roads and pavements.
6th December 2015 – Storm Desmond
This storm caused over 40 severe flood warnings throughout the UK, Cumbria and Lancashire were pounded with a months worth of rain in less than a 24 hour period. 60,000 homes and businesses were left without power and hundreds of people had to be evacuated.
26th September 2015 – Hampton in Arden Fire
When a factory producing toffee apples goes up in flames it takes twenty five fire fighters two hours to tackle the blaze leading to a near catastrophic failure to the business.
31st July 2015 – Royal Berkshire hospital power cut and flood
A major incident of flooding and power cuts led to this hospitals Accident and emergency department closing to all but the most critical patients, working through the night on backup generators doctors tirelessly worked to give patients care, All of this because of a burst underground pipe.
Understanding Insurance Policies
Business Insurance Advice on Individual Policies
We have designed a comprehensive selection of information regarding Commerical Insurance policies which we aim to help educate and information all those who are seeking more Business insurance Advice or information on policies, as well as grow an understanding of how these types of policies can affect or become an integral part of your current or future business, a whole host of policies are listed below for your benefit:
- From Natural Disasters to breakdown of machinery
- Critically important as it relates to profitability
- Taking through appropriate cover is essential with a person experienced in what cover you will need directly related to your business
- Losing income and earnings almost critical to every business, This may be your saviour
Business Interruption Insurance is also known as Loss of Profit or Consequential Loss cover and is pivotal to the future of a business if serious physical damage occurs which is covered by the underlying material damage perils.
- Protection for business equipment
- Protection for people in the business
- Cover Pre-existing medical conditions
Business Travel policies should be arranged in those cases where any Director/Partner/Employees are travelling on behalf of the business. It’s often the case that the travellers are decision makers or key personnel and the impact on the business could be quite severe should anything happen to them.
From Physical damage to Peril’s and Clauses, Find a wealth of information in the link above about Commercial Property Insurance.
- Cyber Business Interruption Loss
- Privacy Breech costs
- Cyber Extortion
- Digital Asset Replacement or “Hacker Damage”
We have grouped these two distinct insurance products together as they are closely aligned as this provides the most comprehensive Business Insurance Advice and coverage.
Whereas ‘cyber’ crime policies are mostly to do with the consequences of a cyber attack from a technology viewpoint, ‘commercial’ crime deals with the wider subject of the consequences of all manner of fraud, both cyber fraud and other terms of fraud, like impersonation or identity fraud quite often emanating from the same underlying cause – the theft of data.
- protection for company officials when corporate indemnification is not available
- catastrophe protection for the individual executives
- protects the insured persons from economic loss arising from claims made against the insured persons for wrongful acts in their insured capacities
A company’s Articles of Association delegate the management of the company to its directors who, in practice, make policy decisions on behalf of the company. They also enter into contracts and transactions as agents of the company and assume the role of trustees in controlling the assets of the company.
- protects you against the cost of compensation claims arising from employee illness or injury, sustained as a result of their work for you
- It is a legal requirement if your business employs one or more people
- employers’ liability insurance is a legal requirement for most/all businesses that have employees
- £5 million is the minimum level of employers’ liability insurance required by law, but most insurers offer £10 million of cover as standard.
Employers Liability Insurance is a statutory requirement and failure to have this cover is liable to a fine, up to £2,500 per day. As an employer, you are liable for injuries to your staff where there is a breach of duty at common law or under statute. You are also required to display your certificate in a prominent position and they must also be retained for future reference, this is more than Business Insurance Advice it is legislation and law.
- Contractors’ all risks (CAR) and erection all risks (EAR) policies are needed for many one-off projects
- Main types of machinery policy, covering movement and installation risks, breakdown as well as business interruption
- electronic equipment can be insured against loss or damage
For nearly 150 years, Engineering insurers have been providing a range of inspection services and insurance covers. Initially activity was limited to inspection services but it has developed over the years to include insurance cover, ranging from breakdown cover on a single item of machinery to complex covers on an ‘all risks’ basis for large building contracts.
- When a marine cargo loss does occur, things can go terribly badly for the business
- take control of their risks; for both importing and exporting
A contract of Marine Insurance is a contract whereby the Insurer undertakes to indemnify the assured against losses incident to Marine Cargo adventure. There are a number of different policies available and it would depend upon the nature and frequency of shipments as to which was most suitable for you and your business.
- covers both small and large fleets of commercial vehicles
- ‘any vehicle’ policies offer you the maximum protection
- opposed to a named policy you can add ‘any Driver’ clause will allow each of your vehicles to be driven by any of your drivers
The Business Insurance Bureau does not specialise in domestic motor insurance, but does arrange motor fleet covers for clients company vehicles, be that cars, commercial vehicles or coaches we can also offer a wealth of Business Insurance Advice on the subject. Motor fleet is simply the grouping of a number of vehicles together under one policy document, with a single renewal date for administrative convenience. The basic underwriting criteria is similar to that for motor insurance generally: the premium charged will vary with the types of vehicles and the drivers.
- Providing clear and easy to follow instructions on products
- Provide full information on risks and warnings
- Continuous monitoring of legislation and supplier information
The Insured is indemnified against legal liability to pay damages and claimants costs, in respect of accidental bodily injury and accidental damage to material property, occurring during the period of insurance and caused by or arising out of Products supplied in connection with the business. This means not only goods but also packaging, containers and labels.
- Offer payments if you are unable to work
- Can cover accident’s and unemployment as well as sickness
- Speak through your policy throughly
Also called Income Protection and designed to provide income during periods of long-term incapacity. Cover can be arranged on an individual basis or employers can arrange a group policy to benefit their employees.
Benefits are paid monthly and limited to an agreed percentage of annual salary. Any salary continuing to be paid and state benefits are deducted from these payments.
- Designed to protect you from both genuine and false claims from clients and third parties
- If you are accused of negligence at any time Professional Indemnity Insurance will be your the best business insurance advice you will have ever gained
- It protects you and your business whilst possibly paying out to any claims made against you.
Claims are increasingly made against persons or firms engaged in professional duties or the provision of such services for alleged negligence, Business Insurance Advice is essential in understanding omission’s or error’s. Consequently insurance protection is sought by two groups:
- Those exposed to the risk of causing bodily injury (doctors, surgeons, dentists, pharmacists, etc)
- Those who may cause financial loss (architects, solicitors, IT professionals, etc)
The term Errors and Omissions (E & O) is sometimes used for policies issued to those who may not necessarily be qualified by a trade or recognized examination.
Some occupations (e.g. insurance brokers, solicitors, chartered surveyors) are required by law to have this cover and over time leading insurers have developed specialist policies particular to certain trades.
- Implied Statutory Terms (e.g. Sale of Goods Act 1979)
- Unintentional Infringement of Intellectual Property Rights of another
- Loss of Documents/Data entrusted to the insured party
- Any negligent act, error or omission
- Unintentional libel, slander, defamation of character
- Unintentional breach of confidence, confidential duty or misuse of information in any form
A public liability policy covers the insured’s legal liability to compensate third parties for personal injury, loss of or damage to property. Primarily, the policy covers risks damage to property. Primarily, the policy covers risks relating to the premises and activities of the business. Unlike Employers Liability, this type of cover is not compulsory but is very often great Business Insurance Advice, It is often a pre-requisite in trading with other organisations.
- Each scheme will have different terms and conditions with varying definitions of terrorism and different exclusions that apply
- Almost all the country terrorism schemes offer coverage for acts of terrorism within the territories of that country only
- There is a strong commercial market for terrorism insurance both for domestic terrorism cover and for global terrorism insurance
- Many companies will wish to buy a global terrorism insurance policy to supplement or replace involvement in state terrorism schemes
- The design of a global terrorism insurance policy is complex and it is likely that specialist professional advice will be required
Acts of terrorism can take many different forms, but typically include bombing, assassination, hijacking or random killings. They are carried out by organisations for political rather than military purposes and by groups generally too weak to mount an open assault on a government or state.
Although the roots for terrorism lie in ancient Greece, it is now regarded as a modern tool, sometimes utilised to devastating effect by individuals who feel alienated and possibly unrepresented by the society in which they live. Governments find terrorism very difficult to prevent and all the while its psychological impact on the public is increasing because of extensive coverage by the press and international media this all has to be taken into account when thinking about seeking the most beneficial Business Insurance Advice.
Insurance Advice Services
What the FCA Do:
Financial markets need to be honest, fair and effective so that consumers get a fair deal. It is the aim of the FCA aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole.
The Financial Conduct Authority do this by regulating the conduct of more than 56,000 businesses. It was established on 1 April 2013, taking over responsibility for conduct and relevant prudential regulation from the Financial Services Authority.
The Association of British Insurers does not sell insurance they provide consumers with general information on business insurance advice and savings products and services. promoting transparency and within the industry. Working with government, regulators and policymakers internationally and inside the United Kingdom.
- has over 250 member companies, accounting for over 90% of the UK insurance market
- our members are major tax contributors, paying £12 billion to the government in 2013
- all our members agree to our compulsory codes of conduct
- is funded by members’ subscriptions
- was formed in 1985
The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA’s Codes of Conduct
- ABIDE BY ALL RELEVANT LAWS, PRINCIPLES AND REGULATIONS. Understanding and ensuring we comply with regulatory principles and work within the law.
- ACT WITH INTEGRITY AND HONESTY. We should conduct ourselves in a fair, reliable, trustworthy and respectful manner with all our stakeholders.
- ACT IN THE BEST INTERESTS OF EACH CLIENT. We have a duty to act in a manner which pays due regard to the best interests of each client and ensure decisions and recommendations are based on a clear understanding of their needs, priorities, concerns and circumstances.
- ACT WITH SKILL, CARE AND DILIGENCE. We act at all times with high levels of skill, care and diligence.
Insurance UK Industry News
Some of the most updated news sources from within the Insurance industry have been listed below, these are subject to change obviously but these provide a wealth of updated and industry relevant information should you be seeking more or alternative sources for business insurance advice.
Insurance Times is a premier news, information and insight website for general insurance in the UK. their audiences include key decision-makers, business placers and principals in brokers, insurers and service suppliers. Thier online news service is widely regarded as the best in the sector.
Insurance Age has been serving the UK regional brokers community for over 30 years. Through exclusive news stories and business insurance advice, analysis interviews and features it delivers the market intelligence brokers need to improve their business.
InsuranceDaily.co.uk is an independent online publication, providing information on insurance companies and markets. While Insurance Daily is primarily delivered for UK readers, they also aim to cover key events across Europe, the USA, as well as world markets. This service is provided by Brite Media.