Business Insurance

How business insurance works

Out of the blue, your business can be threatened in a number of specific areas:

Risks caused by loss of employees:

• Death or incapacity of a key staff member
• Death or incapacity of a Shareholder or Business Partner (in a private business)

Other risks:

• Business interruption
• Public liability (getting sued by a member of the public)
• Employment disputes (getting sued by an employee)
• Professional indemnity (getting sued by a client)
• Any (applicable) legal costs
• Damage to premises, stock and equipment (including vehicle fleet & other logistics)

Holborn Assets Ltd. does not offer advice in these areas but can refer you to an appropriate insurance broker where required.

By providing financial support if these threats emerge, business insurance can "future-proof" a business – whatever the size.

Business insurance applies to all sizes of businesses, from one-man-bands to giant corporations. There’s good flexibility in the market to find a size of package that works for you. Money.co.uk confirms that, "You can get basic policies designed for self-employed tradesmen or professionals; or more comprehensive cover for larger companies and franchises."

Business insurance works on the basis of a deal you make with an insurer:

You, the insured, agree to pay a premium on a regular basis for insurance cover. That cover takes the form of payments which the insurer agrees to pays out in the future if certain conditions are met.

What business insurance do I need?

A powerful type of business insurance is often overlooked – and that is key person/director/shareholder protection.

This type of insurance is often called by different names because it often packages a few separate policies with slightly different aims. Key person protection should not be confused with Life Insurance.

The underlying strength of key person protection is that it covers your business in the event of a director or key member of staff becoming unavailable for work. In practice, businesses often claim because a staff member has died or has developed a life-threatening condition.

Under key person protection, a payout will be made to cover interruptions to business caused by the lack of the key person.

Big insurers Zurich report that coverage may include:

• Loss of profits suffered until a replacement is found, is in place, and is fully effective.
• Pay for the often substantial costs of recruitment and training of a replacement.
• If absence is due to critical illness, if a return to work is on the cards, pay income to the ‘absent’ person and also fund the cost of a temporary replacement.

But that is not the full story of key person protection:

Key person/director/shareholder protection also protects businesses against a giant threat in the form of a shareholder or director dying without the business having the chance to buy their shares and retain control of the company.

Other types of business insurance include:

• Public and product liability insurance
• Employers liability insurance
• Professional indemnity insurance
• Legal expenses insurance
• Commercial property insurance
• Business interruption insurance
• Goods insurance

How much will business insurance cost?

Business insurance is scalable. Packages can be arranged to suit any size of business. With business insurance products, your business should not end up paying for cover that is not needed and this is where professional help comes in useful.

Using their experience and knowledge of the market, your IFA can build your business a custom package of insurance to suit your circumstances. And the advantage of custom is cost-efficiency. Structuring your insurance properly in the first place will reap cost-savings in years to come.

Is business insurance required by law?

All businesses must have employers liability insurance.

The UK Government website says:

"You must get Employers’ Liability (EL) insurance as soon as you become an employer – your policy must cover you for at least £5 million and come from an authorised insurer."

In your own business sector, regulations may apply which require your business to hold other types of insurance.

Why get business insurance?

Our business insurance specialists are passionate about their field:

"You get up in the morning in a house you’ve insured. You drive to your business in a car you’ve insured. But the one thing that is NOT insured is the business that funds your house and your car!"

Business insurance gives you peace of mind by "future-proofing" your business.