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Does your business have the right insurance?

A recent survey has found that 40% of micro businesses - those with fewer than five employees - are underinsured. Not surprising when you consider the minefield of insurance options available to you depending on the type of business you run. Could you be putting your business at risk?

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Here's a quick guide to some of the most common types of insurance a small business might need:

Employment law and health & safety

If you employ people it is a basic legal requirement to have employer's liability insurance in place. However, we also recommend that all employers have legal expenses insurance backed up by employment and legal advice, which can protect you from costly and time-consuming tribunals and health and safety investigations.

To avoid these pitfalls you should also make sure you're up to date on areas of legislation pertinent to your business. Find out how the Forum can help you do this by calling our helpline on 0845 130 1722.

Building and contents

Much like your home, you need to make sure your premises and all the equipment, computers and stock you use in your business are adequately covered. Your business premises, stock and equipment are all at risk from theft, accidental or criminal damage, as well as natural disasters like flooding, so it pays to make sure they're protected.

There are also plenty of things you can do to prevent the worst from happening, such as making sure your premises are thoroughly secured and keeping valuable stock and equipment away from areas that are likely to be prone to the elements.

Should the worst happen, you should also have a plan in place for how you'd deal with any of these occurrences whilst you're waiting for insurance to be paid out.

Protecting your business and yourself

Any business that has visitors to its premises or involves work on client sites needs public liability insurance. If you exhibit or sell at some events they may also require you to have this. It covers you for compensation claims and legal expenses if a customer or member of the public was to suffer a loss or injury as a result of your business activities.

Professional indemnity insurance covers you against claims of professional negligence made by customers and any damages awarded in a civil case. This type of insurance is commonly used by those providing services or consultancy.

Working from home

If you run your small business from home, this could invalidate your home insurance and affect any associated life insurance policies, so it's important to inform the relevant insurers of your business activities to make sure you have the correct level of protection.

Vehicles

If you require use of a vehicle for work, obtaining appropriate motor insurance for business use is vital – your standard car insurance won't necessarily cover you if you're using the car for work purposes.

For more information on how the Forum can help you protect your business with discounted business insurance, call us now on 0845 130 1722.

Source: Lloyds TSB Insurance Big Issues for Small Businesses report

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