A simples guide

What is commercial insurance?

It’s great when you run your own business, you get to call the shots and generally rule the roost within your empire. But there’s other stuff about being in charge that isn’t quite so fun – like sorting out your insurance. It’s just another one of those boring admin jobs that you have to tick off the list – but do you actually know what it’s all about and are you sure that you’ve got enough cover if something did go wrong? Don’t brush it under the carpet – knowledge is power so read our commercial insurance guide to make sure you’re in control.

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What is it and what does it cover?

Basically, it’s insurance that covers your business against claims made due to damage, loss, injury and even death. It can insure you against claims made by employees and the public.

The term ‘commercial’ or ‘business’ insurance itself is commonly used to describe employer’s liability and public liability insurance – which are considered the two main types of commercial insurance. In practise though, there are several different types of commercial insurance available, each one covering a slightly different aspect of business.

Types of commercial insurance

Business insurance is usually sold as a package which includes various types of insurance under one policy. The type of commercial insurance that will be most beneficial for your own business will very much depend on what you do and where your business is based. Here’s a look at the different types of commercial insurance available:

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Employers’ liability insurance

If you employ anyone, then by law you’ll need to have employers’ liability insurance. Even if you only employ one person, whether that’s on a full-time, part-time or casual basis – you must have it. If you don’t then you can be fined up to £2,500 for every day that you don’t have it (so you’d better check).

It covers you for any claims made by an employee because they’ve suffered injury or illness through work. The only exemptions are businesses with no employees, family owned business that only employ close relations and organisations run through public funds.

Your policy should cover all permanent employees, contract and casual staff and sub-contractors. The way to tell if you employ someone is to ask yourself:

  • Do you deduct National insurance and income tax from their salary?
  • Do you dictate their working hours, place of work and work conditions?
  • Can you replace them if they are unable to work?

If you answer: yes, yes, no then bingo! you’re an employer and you need employers’ liability insurance.

Public liability insurance

This covers your business for any claims made by members of the public. It compensates claimants who suffer any personal injury (even death), damage or loss to property that occurs in connection to your business. Some businesses like horse riding establishments must have public liability insurance by law – if in doubt your local council should be able to help you with any legal obligations.

It should cover you whether you deal with the public from a business premises (whether that’s an office, showroom or your home) or if you’re out and about if your business hosts events and activities.

Don’t think that a claim against you ‘will never happen’ accidents are, after all – accidents and usually happen when you least expect it. All it takes is a slip or a fall on your property for a claim to be made against your business – in which case you’ll find your public liability cover handy to say the least.

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Motor insurance

Another legal must have if you own vehicles in relation to your business. You’ll need at least third party cover to stay within the law.

If your employees use their own car in connection to their work for you then they’re responsible for sorting out their own insurance – but you’re responsible for making sure they have the legal minimum.

Business buildings and contents insurance

You wouldn’t think twice about protecting your home and all your belongings – the same should go for your business premises and stock.

If you own your business premises, then your insurance should cover the cost of repairing or rebuilding it. If you rent your property, then buildings insurance is your landlord’s responsibility. But in both cases you should consider insuring your business contents like goods or equipment. When it comes to insuring your stock, you’ll need to judge its value on the cost price rather than the sale price.

Getting a good deal

We know that running a business is time consuming and you need results quickly and for the best value. Luckily, we’re in the business of comparing stuff like commercial insurance, so you can either search for a deal to suit you online or you can request a call back from one of our experts who’ll be able to tell you what’s what.

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