Key Takeaways

  • Business protection and insurance exist to protect your business in case it becomes liable for an accident, incorrect advice, or a cyber breach
  • It is a legal requirement to have an employer's liability cover if you employ someone other than a family member
  • You can insure your business to provide a lump sum in the event of death to a colleague. These funds can be used to purchase company shares from the estate of the deceased
  • Cybercrime is on the rise and protecting your business could get you up and running asap if you are targeted

What is Business Protection and Insurance?

Business protection and insurance refer to the measures taken by businesses to safeguard themselves against potential risks and uncertainties. It includes various types of coverage, such as liability insurance, property insurance, and business interruption insurance, designed to protect businesses from financial losses and ensure continuity in the face of unexpected events.

In business, things don't always go to plan. It's important to consider the risks involved and how you can protect yourself and the business from becoming legally liable.

In the UK, certain insurance is mandatory for business. It's important to know how you could be impacted.

Looking For Business Insurance Advice?

Are you looking into business insurance, and need a little help?
We can help you find a business insurance adviser to offer you the very best advice. Complete our Sunny Fact Find form to provide us a bit more detail about your circumstances and we'll find the best-suited adviser for your needs.
Your appointed adviser will contact you to discuss how they can help, you decide how to proceed.

What are the types of Business Insurance?

Typical business insurance includes public liability cover, employer's liability cover, and professional indemnity insurance.

These covers protect the business from legal costs and compensation that may become due. 

The type of business cover you need will depend on the nature of your business and the industry you operate in.

If you are unsure, you can speak with your insurance adviser, the governing body of the industry, or the regulators.

Public Liability Cover

Public Liability insurance exists to protect your business in the event of a claim made by the public.

If you are at fault for an accident or injury to a member of the public, you may face a legal battle for financial compensation. Depending on the severity of the incident this could set the business some way back. 

It is not a legal requirement to have public liability insurance but it is advisable if you are dealing with the public in an environment that could allow for slips, trips, and falls, such as in a shop.

Common claims for Public Liability cover
  • Exposure to hazardous materials, and chemicals
  • Burns, and scalds
  • Falling objects,
  • Accidents in schools

If you do not have Public Liability cover you may find it difficult to work in some sectors. For example, if you plan on working with the NHS it is generally insisted upon.

You can be covered for as little as £60 a year. 

If you are a tradesman, builder, hairdresser, cleaner, gardener, restaurant or cafe owner you are at a high risk of having claims made against your business and you should strongly consider putting business protection in place.

Professional Indemnity insurance

Professional Indemnity cover protects your business against any claims made for financial loss caused by incorrect advice or poor service.

Professional indemnity insurance is suitable for those working as Financial Advisers, Accountants, Surveyors, Engineers, and health care professionals.

Common claims for Professional indemnity insurance
  • Incorrect advice or recommendations
  • Misinformation
  • Breach of Professional code
  • Loss of documents
  • Breach of confidentiality

Professional Indemnity insurance is not a legal requirement. However, clients may choose to only work with businesses that do have cover in place.  If you intend to join a professional body, it may be a prerequisite.

Most financial Advisers and Mortgage advisers have indemnity insurance provided by the networks that provide the products they support you with. You can look into their profiles to check what cover they have in place.

Employer's Liability Insurance

Employer's Liability insurance covers the business for any financial impact that may be caused to any employees in the work environment or as a result of being employed by the business.

Common claims for Employers Liability Insurance
  • Slips, trips & falls in the workplace
  • Manual handling accidents
  • Accidents caused by defective or dangerous work equipment
  • Accidents caused by lack of training
  • Accidents caused by lack of protective equipment

Employer's liability is a legal requirement in the UK for anyone with employees who are not family members.

Cyber Insurance

Cyber Insurance protects your business against the financial implications of suffering a cyber attack.

Common claims of cyber insurance
  • Hacks
  • Data breaches
  • Financial crime
  • Lost income
Cyber support services

Cyber insurance usually comes alongside a 24-hour support service. This service looks to provide immediate advice surrounding any sort of cyber attack. Time is often critical in these attacks and cyber support can get your business back up and running as quickly as possible.

If you are attacked, cyber insurance responds by providing IT experts to stop the attack and fix your systems, legal advice to advise on data breaches and GDPR, and PR experts to defend your reputation.

Cyber insurance policies are bespoke to your business needs. The level of cover you need depends on your IT infrastructure. The factors to consider can make it difficult to accurately cover your business when selecting a policy, especially if you aren't sure of what is needed. It is a good idea to talk through your business requirements with an Insurance adviser.

Business Protection Insurance

Business Protection is a group of insurance products that aim to provide a lump sum in the event of a key employee or director becoming critically Ill. Business protection insurance works in a similar way to personal protection insurance. Should an owner or key person in the business become critically ill or pass away, the business protection will pay a lump sum. The lump sum can be used to clear business debts.

Shareholder Insurance

The cover provided by Business Protection insurance can be extended to shareholders. This additional cover would pay a lump sum to the business that can be used to purchase shares from the estate. The business is then able to carry on with full voting rights, whilst remunerating the business owner's family. 

Keyman Cover

Business protection insurance can also include Keyman cover. That extends protection to any person with a significant impact on the business. This could be a director, senior manager, or other employees.

Business Protection and Insurance Advice

Consulting with experts in the field can help you assess the specific risks your business faces and determine the most suitable insurance coverage. They can guide you on policies such as general liability insurance, professional liability insurance, property insurance, and keyman insurance. These experts will tailor the insurance solutions to your business needs, ensuring that you have the right coverage to mitigate financial losses and maintain business continuity in the event of unforeseen circumstances. Their expertise can provide valuable insights into the complexities of insurance, helping you make informed decisions and protect your business effectively.

Public liability cover protects you and your business in the event of a claim made by the public for certain incidents that could be at fault of your business.

It covers the cost of compensation. Claims examples could be for personal injuries, loss or damage, and death.

Public liability insurance isn't mandatory under UK law but it's worth considering if you could find yourself liable for an incident and how it would impact the business and its finances if there is no cover in place.

Employer's liability insurance protects you and your business in the event of a claim made by an employee for certain incidents that could be at fault of your business and being employed by it. It covers the cost of compensation.

Claim examples could be personal injuries, sickness, and death. It can cover legal costs, medical costs, and lost income.

Employer's liability insurance is a legal requirement. There are some exceptions and these include, certain limited companies with only one employee who owns more than 50% of the business, sole traders who do not employ anyone, if only family members are employed, and many governments and public bodies who are insured in different ways.

It is a legal requirement to have an employer's liability insurance in place if your business has employees. If you are not insured your business could face a fine of up to £2,500 for every day you're not covered.

Professional indemnity insurance protects you and your business in the event of claims made by a client as a result of advice provided which has resulted in losses. Claims can be raised against you even if you offered advice for free. This insurance is suitable for Accountants, financial consultants, surveyors, engineers, and healthcare professionals.

Business protection insurance protects you and your business from the financial effects of key people in the business being diagnosed with a critical illness, or passing away. The funds can be used to purchase the deceased partner's estate/shares. Alternatively, the funds can be used to clear debts to help the business continue to run.

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