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A Guide to Business Insurance
A Guide to Business Insurance Covers
If you own or manage a business, either large or small, you will require some type of insurance to protect your company against the various risks and potential multitude of claims, that your business will face.
Commercial Insurance Brokers
The essentials of the broker’s task will be the same, however, for the largest company as it is for the individual: to use his knowledge of insurance and of the insurance market to help his client to arrange a sound insurance programme which, to the maximum extent possible, meets the client’s particular needs.
The Business Insurance Broker will handle the insurances of a small company in a manner very similar to those of an individual. The relationship is likely to be a personal one wit the directors of the business, and they can be considered, in a way, as individuals who have a different, and more extended, set of insurance needs because of their involvement with the company.
Most large companies will require some degree of risk assessment before the policy is underwritten, which may often include a visit to the business premises or site, and for this reason these types of larger business usually employ the services of specialist commercial insurance brokers.
Fire insurance will be very important, as will consequential loss insurance to protect the firm against loss of earnings during the period following a fire until it is fully back in business.
The broker may also be asked to provide insurance covers for staff, a group life and pensions scheme, or personal accident or permanent Health Insurance for example.
The individual may be happy to consult a broker for life or motor insurance only, but the industrial company is likely to want a single source of advice for all its insurance problems.
The larger the client company is, the less it will be interested in buying standardised commercial insurance covers or packages designed for small business insurance, and the more it will want policies which match its own specific needs.
The problems of a small spread of risk may be overcome because the company is large enough to be rated on its own past record rather than as a member of a trade which is rated as a class in an SME business insurance package.
This meant that there was a tendency for risk management to become part of the business insurance function. As the insurance-buying portion of the insurance manager’s job reduced and he became more active in managing self-insurance programmes and loss control budgets, the term ‘risk manager’ became more common and today is used by the majority of those who would have been called ‘insurance manager’ in previous years.
Commercial insurance or Business insurance as it is commonly known, is a complicated area of underwriting and because all businesses are different, and face different risks depending upon the nature of the company, various packages and combined policy covers have been introduced by insurance companies and commercial broker schemes, to make the process easier.
Business Insurance Risks
The biggest risk to a business faces is from liability to others and the costs and damages of being sued.
All companies are required by law to have in place liability cover, called Employers liability insurance or EL, to protect their staff against all potential risks and accidents while in the workplace.
A further type of liability insurance called Product liability is also available to companies under a commercial liability policy which protects the company against claims made for design or manufacturing faults in the product.
Property Damage
Most business large and small will have premises that need protection against buildings perils such as fire and flood and commercial property insurance is available to cover all buildings insurance risks. Similarly commercial contents insurance for business premises is available which covers office and business equipment including files and data processing against the common perils. For companies that carry stock, this type of business contents insurance can be extended to cover risk such as deterioration and damage.
For the small businessman who works from home these covers are often available with strict limits of indemnity, as a bolt on to a standard home buildings and contents policy. This type of cover is often effective for self employed people with just a computer and a home office.
Additional Commercial Risks
Because commercial insurance is designed to cover all classes of business, there are many various trade or business specific covers available which can be added to a combined policy.
Examples of these covers include glass cover, book debts, commercial vehicle insurance, warehouse cover, and theft by employees.
Outside of most combined policies are additional risks more often sold under separate policy covers, that should be considered to protect your business against all eventualities.
Examples of these are, Commercial Legal Expenses insurance cover which protects the company against claims made by employees for unfair dismissal and allows you to bring cases against suppliers.
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Purchasing commercial risks insurance can be a daunting experience for the uninitiated small business owner and unless the risks are straightforward and can be underwritten online, it is advisable for all companies to approach the services of a local or regional commercial insurance broker.
Furthermore, in the event of a claim, and as most businesses will be faced with claims at some point in their trading life-cycle, the broker will handle all the settlement negotiations with the insuring company and allow you to continue what you do best – running your business.
Commercial insurance and tradesman risks covers for small business insurance are widely available online today.
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