Is your business at risk?
|
|
 |
| Ian Jones |
Small businesses and the self-employed are by and large not well served by the insurance industry. Household-name insurers are increasingly geared to mass markets or to large corporate clients, with ‘one size fits all’ policies handled by call-centres.
The small business customer is caught between the two - standard business insurance policies are largely unsuitable and expensive for this sector, whilst the attention and advice needed by small firms makes them time-consuming and unprofitable for big insurers.
If you’re running a business from home, or freelancing with home as your base, don’t assume that your normal household insurance will meet your business needs – the chances are it almost certainly won’t. Even so-called ‘home with business cover policies’ will leave you exposed in a number of key areas. Or if you’re renting office premises, don’t assume that the landlord’s insurance will cover your business – again, it’s not likely.
In any event, it makes good sense to keep your business covers separate from any other arrangements – it will make claiming easier should you have to, and as business insurance premiums are tax-deductible, having stand-alone business policies make it easier to account and claim for them.
Whatever insurance cover you have got, check it in detail to see that it matches what you need. Even today, some insurance companies still treat portable business equipment like laptops and mobile phones with great suspicion and won’t cover them at all – never mind that for most of us believe they’re now essential everyday business tools! And if they do cover them, they’ll sometimes exclude cover for Accidental Damage – the most common claim for this type of equipment.
Even more importantly, there are some key areas that ordinary policies simply won’t include, like Business Interruption. A standard household policy will pay for the costs of temporarily re-housing you if something awful like a fire or flood devastates your home. But what about your business?
Can you really operate from a hotel room or temporary rented accommodation that you’re sharing with the family? If you can’t, who’s going to pay for suitable business accommodation and all its related costs like heat, light, rates and so on? Unless you’ve got proper Business Interruption cover, you are.
Any business, no matter how small, needs to consider Liability insurance. Designed to cover the cost of compensation awarded to people who become ill or injured in connection with your business, Liability is a business insurance fundamental.
For example, the minute you hire someone, even if it’s a part-time, cash in hand, the law says you must have Employer’s Liability cover – without it you’re exposed to both breaking the law and being sued by an employee if they’re injured at work.
And what about Public Liability? Protecting you against the cost of being sued by a member of the public injured in connection with your business, Public Liability is sometimes available in limited form under household policies – but usually restricted to members of the public who visit you at your home. Which is fine as far as it goes – but it means you’re not covered if you visit clients at their premises.
Any business that offers advice of any sort to its clients ought to think about Professional Indemnity cover – which means that if you’re sued for having made a mistake, you’re covered for the costs both of defending the case and any award made against you.
In an increasingly litigious society, this is protection well worth having. What many people aren’t aware of is that no matter how “right” you might be in such cases - and even if this is proven in court - the cost of defending any claim, no matter how ludicrous, can run into thousands. With a Professional Indemnity policy in place, it’s taken care of – without a PI policy, you pay.
The problem is, the PI policies most generally available are designed for big business, with multi-million pound levels of cover – and premiums to match. For the smaller business, it’s unaffordable overkill. “I’m not worried about being sued for £2 million,” one independent businessman told us. “I’d just pack up and go and live somewhere warm. But it’s the thought that I could be sued for say £30,000 that keeps me awake at night.”
The answer is to seek out the smaller, more flexible insurer that recognises that the small business customer wants lower levels of PI cover and lower premiums.
Even if you don’t need Professional Indemnity, it’s worthwhile considering Legal Expenses cover. This will not only pay the cost of going to court in connection with your business, in many cases it will also pick up the tab for accountancy fees incurred by tax or VAT investigations. Check to see that a Legal Helpline is available – this is usually free and can be invaluable, especially when it comes to employment matters.
If you haven’t got the right insurance protection, your business can be vulnerable. Getting reliable advice from experienced, qualified professionals is the key to selecting the insurance that’s right for you, whether through an independent broker or directly from an insurer who can offer flexible, affordable policies.
With the proper protection in place, you can concentrate on steering your business into the future, rather than worrying about the risks.
Ian Jones is the head of Icon Insurance - www.icon-insurance.com. You cna contact him on 020 78986710 or email him directly at ijones@icon-insurance.com
| 
