Business insurance covers many things, including staff injuries, property damage and legal fees. But most small businesses don’t have enough coverage for their workers. And even if they do, it doesn’t cover everything.
A good policy will help you recoup costs if something goes wrong. Here are three types of business protection that every business owner should consider.
1. Workers compensation
Workers comp protects employees against workplace accidents. If you injure someone while working, you’ll likely be required to pay medical bills and wages. If you cause serious injury or death, you could face criminal charges.
2. Property insurance
Property insurance helps protect your building and equipment against theft, fire, vandalism, natural disasters, and more. You might also want to insure your inventory, fixtures, and tools.
3. Liability insurance
Why entrepreneurs may require protection
Businesses rely on people to run them every single day. If those people suddenly become ill or injured, it could mean disaster for your company. In fact, one study found that nearly half of small businesses close within five years of losing a key employee.
Protecting your business against loss or damage of key personnel will allow your business to continue operating normally while looking for new staff members. This type of coverage provides compensation for lost profits during the period of time your business is unable to operate due to injury or illness of a key person.
Business protection also helps protect your company against financial losses caused by sudden change in circumstances such as natural disasters, war, civil unrest, etc.
Choose the appropriate form of protection for your company.
If you are a sole trader, limited company, partnership or LLP, it is likely that you do not need any form of business protection. But there are some areas where you might want to think about protecting yourself against potential legal issues. If you run a business as a sole trader, limited partner or director of a limited company, you could find yourself personally liable for certain types of claims. For example, if someone sues you for negligence, you could face personal bankruptcy. You could also be sued for breach of contract, fraud, misrepresentation, defamation, copyright infringement or even sexual harassment. In addition, if you are a member of a partnership, you could potentially be held responsible for the actions of your partners.
There are many different forms of business protection that you can purchase. These include Directors & Officers Liability Insurance, Professional Indemnity Insurance and Employers Liability Insurance. Each policy differs slightly depending on what risks you wish to protect yourself against. However, the main difference between each of these policies is how much cover they provide.
1. Key person insurance
Key Person Insurance gives businesses an additional layer of protection against the unforeseen.
If you’re looking for a solution to protect your business against the risk that one of your employees could die or become disabled, Key Person Insurance might provide exactly what you need.
There are two main types of coverage – Business Continuity Cover and critical illness cover.
Business continuity covers pays out if someone dies or gets injured while working for you, even if they aren’t employed by your company.
Critical illness covers provides financial support if someone develops a serious medical condition such as cancer.
A key person policy will pay benefits if someone dies or becomes sick, regardless of whether they work for you or not.
In addition to paying benefits, it includes other protections, including life assurance, critical illness, income protection and travel expenses.
2. Relevant life cover
Relevant Life Cover is a form of life insurance which provides benefits to your family if you die while still employed. It is designed to protect your family against financial hardship caused by your untimely death.
The policy pays out a lump sum to your beneficiary(ies), rather than paying out over a period of time like some life insurance policies do.
This type of cover is attractive for people who are earning a lot of money and want to make sure that their loved ones will be financially secure after they pass away.
You can choose how much coverage you want – either £10,000 per person or £20,000 per couple.
If you decide to take out a relevant life cover plan, you’ll pay a premium every month. You might even find that the amount you pay is lower than what you’d normally pay for other types of life insurance.
For example, if you buy a term life policy costing £1,000 a year, you’ll pay £12,000 in premiums over 10 years. If you bought a relevant life policy costing £500 a month, you’d pay just £6,000 over the same period.
There are many different reasons why someone might choose to take out a relevant cover plan. They could include:
3. Shareholder protection
Shareholder protection allows your family members to receive a lump sum payout upon your death. This is an insurance policy that helps protect the remaining shareholders against losing cash due to your sudden or unexpected passing away. If you are concerned about how your estate will be distributed following your death, this could be the solution for you.
Frequently Asked Questions
How do I protect my business from being sued
1. Business Insurance
Business insurance is something that many people overlook until they need it. If you have a small business, then it’s likely that you’ll never need to make use of these services. However, if you’re running a larger company, then it’s highly likely that you’ll find yourself needing to take out some sort of protection plan. There are two types of business insurance policies that you may want to consider taking out – commercial liability insurance and professional indemnity insurance. Commercial Liability Insurance covers any claims made against you personally, while Professional Indemnity Insurance only covers claims made against your business. Both cover different aspects of your business, so it’s worth doing some research before making a decision.
2. Employer’s Liability Insurance
Employers’ Liability insurance is designed to protect employers from legal action taken against them due to injuries suffered by their employees. It does not provide coverage for personal injury claims, however.
3. Public Liability Insurance
Public Liability insurance provides protection against damage caused to third parties (such as members of the public) by your business. It doesn’t cover claims made against your own staff, though.
4. Data Protection Insurance
Data Protection insurance ensures that your data remains secure at all times. In the event that someone hacks into your computer system and steals your information, you could face financial penalties or even prosecution.
5. Cyber Insurance
Cyber insurance is designed to protect businesses against online threats. These range from viruses and malware attacks to hacking attempts and denial-of-service attacks.
6. Workers Compensation Insurance
Workers compensation insurance pays out money to injured workers who suffer work related accidents. You should ensure that you carry out regular safety checks around your premises to avoid any unfortunate incidents occurring.
7. General Liability Insurance
General Liability insurance is designed specifically to protect companies from any claims made against them due to accidental damage or loss.
Why is liability protection important
1. In case of any damage caused due to negligence of the company, the client would have to bear the cost of repairing the damages.
2. If the client suffers any loss due to the negligence of the company, he/she could claim compensation.
3. The company should provide insurance cover for its clients.
4. The company should ensure that the premises are safe and secure at all times.
5. The company should maintain proper records of the work done.
6. The company should keep the client informed about the progress of the project.
7. The company should inform the client if there is any change in the schedule.
8. The company should complete the job within the stipulated time period.
9. The company should not delay in delivering the product after receiving payment.
10. The company should deliver the product according to the specifications provided by the client.
11. The company should give warranty for the products delivered.
12. The company should take necessary precautions while handling hazardous materials.
13. The company should follow safety procedures while working.
14. The company should make sure that the site is free from any kind of pollution before starting the work.