FAQs Archive | Thomas Carroll

What is business insurance?

Business insurance covers your business in the event of an emergency of unforeseen circumstances. It will provide you with peace of mind that your business will be able to continue to operate should anything happen to your property or equipment. Any potential claims would be met if a third party was injured on your premises.

What is an excess?

An excess is the amount of a claim that is payable by you. For example, if you select an excess of £500 and have a claim worth £2,500, then you will pay the first £500 and insurers will pay the rest (£2,000).

Can I cover my tools, equipment and stock?

Yes, these are key areas of many business insurance policies. Make sure that your property is insured for its full value and keep receipts or other proof of ownership.

Do I need Employers Liability cover?

As a general rule of thumb, you need to provide cover for anyone who undertakes work solely for you in a paid capacity or who cannot employ a substitute if they are unable to do the work.

What is an employers reference number? (ERN)

An Employer Reference Number, also known as an Employer PAYE Reference, is given to every business that registers as an employer with HM Revenue & Customers (HMRC). If a business pays an employee above the PAYE threshold, they are required to have an ERN. This is the reference number for their employees' income tax and national insurance contributions.

Do I need business car insurance?

If you are using your own car for business purposes, you will need to include business use to protect you while you are on the road, if it isn't already included in your current car insurance policy. You should also check whether your car insurance covers commuting to work.

What is business car insurance?

Most standard car insurance policies only provide cover for social use and commuting. If you use your own car in relation to your business (e.g. doing deliveries, picking up supplies or visiting clients) then you need to ensure you are covered for business use.

In an office, what is buildings and what is contents?

'Office buildings' covers the fabric of the building itself and the improvements you have made to it structure. 'Office contents' covers all the items you store inside or remove from the building.

Am I insured against Cyber attacks?

Most commercial insurances do not provide cover as standard for losses from Cyber attacks. Some insurers may include limited cover but these are often restricted and may not provide the breadth of protection your business needs. Importantly, many losses that are considered 'Cyber' are actually crime, professional indemnity or directors and officers risks. You should seek expert advice on your risk and insurance needs from a specialist broker.

What level of business insurance do I need?

Some regulatory or professional bodies will set minimum cover levels for their members, so you should check their handbooks. If your business employs staff, you're normally legally required to have at least £5 million of Employers' Liability Insurance.

In addition to the above, you should also think about the scope of the work undertaken by your business and what sort of compensation costs you would face if something went wrong.

With regards to your business premises and contents, you should think about the costs that would be involved in rebuilding your premises from scratch and replacing your equipment and tools.

How much does business insurance cost?

Your insurance premium is calculated by taking into consideration the nature of your business and what work you do, the size of your contracts and the cover types and levels you choose. Businesses with a higher level of risk will usually pay higher premiums.

What type of business insurance do I need?

This depends on your business and the type of service you provide. The most popular types of business insurance are:

Public Liability Insurance

If your business comes into contact with members of the public (at your premises or elsewhere), you should consider Public Liability Insurance. It will protect you if a claim is made against you in the event of injury, damage made by clients, customers, suppliers and other third parties.

Employers' Liability Insurance

If your business has employees, you are most likely legally required to have an Employers' Liability Insurance policy. Some businesses are exempt, including some that employ close family members. If a member of staff suffers an injury, illness or damage as a result of their work, compensation claims will be covered.

Product Liability Insurance

If one of your customers suffers damage as a result of a faulty product, even if you didn't manufacture the product, Product Liability Insurance will protect you.

Professional Indemnity Insurance

Some professional bodies and regulators, including those for surveyors, accountants and architects, require their members to have Professional Indemnity Insurance. This type of insurance is important if your business provides advice or a professional service to other businesses, or if you deal with client data or intellectual property. If they lose money as a result of a mistake made by you and sue you, it will cover compensation claims or legal costs.

Personal Accident Insurance

Personal Accident Insurance covers lost income, medical costs and hospitalisation (up to the limit of the policy) if the insured suffers a serious injury or death caused by an accident. The maximum amount is £10,000 for an injury and £20,000 for death.

Business Buildings Insurance

Business Buildings Insurance should be a priority if you have business premises, such as a shop or office, and also if you work from home. A business building might already be covered if you rent the premises, but ensure you check with your landlord.

Business Contents Insurance

Business Contents Insurance can protect the contents of your business premises, your equipment and tools. If they are damaged, destroyed, stolen or lost, it will cover the cost of replacing or repairing these items.

Stock Insurance

Stock Insurance will cover the cost of replacing any stock that you have on your premises or in storage if it's damaged, stolen or destroyed.

Business Legal Protection Insurance

Also known as Business Legal Expenses Insurance, Business Legal Protection Insurance will protect you against the potential legal costs of legal action brought by or against your business.

Business Interruption Insurance

If your business is disrupted by material damage as a result of a flood, fire or other event, Business Interruption Insurance will provide you with the financial cover you need to get back on track.

What business insurance types are legally required in the UK?

Employers' Liability Insurance is mandatory for most businesses that employ staff, making it the only type of business insurance that is a legal requirement in the UK. On the other hand, some regulators or professional bodies require you to have certain types of insurance if you work in particular professions, such as if you are a solicitor or accountant.

In addition, it's also possible that you won't be able to sign contracts without having certain types of cover in place. You should check if your clients have any insurance requirements before you take on any work.

Even if it's not compulsory for your business to have insurance, you should still consider taking out cover regardless, in case of accidents and damages, theft or legal fees.