Are you covered? Five things to remember when buying business insurance

Business insurance and personal insurance have many similarities, but they should not be treated equally when purchasing. Here are five considerations when you look to protect your business.

Only two types of insurance are legally required

While there are a host of different insurance policies on the market only two will be legally required for most companies. They are Employer Liability which protects a company against claims from its own staff in matters of injury or illness (and failure to meet these legal obligations can result in a £2,500 daily fine), and third-party motor insurance to protect motorists. Others may also be necessary depending on the type of business - many types of company will require personal indemnity insurance, for example, if any service (such as accountancy and finance) is offered.

There are insurance policies you may never have heard of

You’ll be aware of the types above, and no doubt buildings and contents insurance and many others. But what about key person insurance, or trade credit insurance? The former covers those people in your company that are absolutely vital and would cause the company significant harm if they became ill or injured, such as perhaps a CFO, manager or senior shareholder. The other, trade credit insurance, will cover policy holders in the event that a company defaults on money owed. There’s also cyber insurance, business interruption insurance, and many more.

Package policies are sometimes wise

It can actually be quite confusing knowing which types of insurance you need and which you don’t, particularly if your business is complex and employees have a range of different responsibilities. A packaged policy, worked through with a dedicated insurance expert, should not only cover all of your employees, but may also save you money and a lot of time. It also gives you one single renewal date to work towards.

Using brokers can be a wise decision

Too many of us are just content with our current insurers, or don’t have the time to scan price options from hundreds of different insurance companies directly (even though comparison sites such as Know Your Money can help significantly).  That means we don’t necessarily pick up the best deal. Finding a strong deal for yourself is not difficult, but brokers can save a lot of the legwork and may be able to secure more bespoke deals. They’re also a good portal for gaining advice before you buy, offering a human experience that an algorithm or search engine can’t achieve. You’ll have to balance whether the service a broker provides represents good value for money, and if it isn’t you can always try it yourself next year.

Reading the forms and information is paramount

Presenting incorrect information when applying for the policy in the first place can be a costly mistake. For example, many applicants under-insure their contents to save on the premium, but if a company uses the ‘Average Clause’ this can be detrimental – here’s an example of the clause in action. Other common mistakes include taking out the cheapest premium and not considering slightly more expensive competitors that may be more appropriate, and not reading the terms and conditions.

 

Recommended Business Insurance Partner

At Smarta, we partner with Hiscox for Business Insurance, and as you can get 10% off your business insurance quote through us here.

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