If you have recently set up or are planning to start your own business, I don’t doubt that arranging suitable business insurance to cover your risks will feature as a priority on your to-do list. There are certain types of insurance you are required to have by law, for example Employers Liability and motor vehicle insurance; others will seem obvious to you, such as public and products liability and insuring the physical aspects – bricks and mortar, contents, stock – and then there may be other risks particular to your trade or industry.
I find it’s often the latter that can leave new business owners guessing, not quite sure of what they can – and need – to insure. So I thought it would be helpful to put a brief guide together to explain the not-so-obvious types of business insurance.
When you make your living providing advice, or are in the business of producing written material, there is always a risk that an error or omission could be made. If someone has relied upon your advice or written guidance and goes on to take action or make a decision based upon it, and then later finds that advice to be incorrect and suffers consequential losses as a result, you could face a costly claim. Professional indemnity insurance will cover you for any compensation claimed and legal expenses incurred.
Contract Works Insurance
If you are involved in working on site, supplying or constructing, then you should insure your materials on site, including those already fitted, until the contract ends. This policy can also be extended to include owned or hired plant.
If a competitor should start using your registered designs and trademarks, or your brand identity, copy or images from your marketing collateral; or create something of their own that appeared very similar to yours, it could be very damaging for you, both financially and reputation wise. You may lose customers who switch products or brands unknowingly thinking they are connected to your business. Or a product that looks just like one of yours could prove to be inferior in quality and turn customers against your brand. You can protect what is known as your intellectual property with insurance to cover your legal expenses in pursuing action for damages.
Commercial Legal Expenses
Disputes are more likely in some industries than in others. Disagreements over contracts, property or employment related issues could see you having to defend or pursue a claim, and this can be very expensive, especially if it culminates in a court case. If you operate a franchise, or are a franchisee, this is one area in which disputes become more likely, as are licensed trades where any failure to comply with regulations can lead to costly action and fines. Commercial legal expenses insurance will cover legal fees up to a given ceiling for any criminal or civil proceedings. You can also take out ‘loss of licence’ insurance to cover you against a reduced business sale value or a drop in profits should you lose your trading licence.
Product Liability and Recall
If you manufacture or supply products that could potentially cause injury or damage property, product liability insurance is crucial to protect you against any claims. Faulty products are in the news all too often these days – from fridge freezers to children’s buggies – and recalls can be extremely costly. Product recall insurance will cover the costs involved in recalling and replacing goods should a potential fault be discovered.
Engineering & Machinery Insurance
You’ll usually find plant is covered under material damage insurance and cover for consequential loss. But if your machinery should break down or suffer sudden damage, there is cover to specifically protect your business against down time and loss of profits. Hired machinery can also be covered.
Businesses in the manufacturing or disposal sectors are potentially at risk of causing environmental contamination if correct processes are not adhered to. As well as clean-ups being required, there could be third party issues such as injury or illness, or damage to property or land. Environmental impairment insurance is a niche type of cover that will insure a business for all these associated risks.
Goods in Transit / Marine Transit
If you are in the business of supplying goods then no doubt you’ll have it covered when it comes to insuring the stock stored on your premises for material damage. But if you ship goods out to customers, whether in the UK or abroad, you’ll need separate goods in transit cover to insure items for loss or damage between leaving your premises and arriving at their destination. If you are shipping products out by air or sea, or importing goods from overseas, you can cover them with marine transit insurance: a flexible type of insurance that will allow for varying shipping volumes and trading terms.
Tailored Business Insurance
Of course these are just a handful of the business insurance policies available. Our job here at Robert Gerrard is to get to know your particular business and use our experience to work out the specific cover you’ll need to protect it, and even the most unusual scenarios or niche trades don’t faze us. Need advice? We’re here to help so get in touch today.