Whether you work from a home office or on a shared office premise, losing the equipment your business relies on to operate can cripple your hard work substantially. Business contents insurance covers the possessions that are a part of your business, so that you can dust yourself off and carry on if they’ve been lost, stolen or damaged.
What is business contents insurance?
Business contents insurance covers the equipment and furnishings you use for your business against theft, loss or physical damage.
This includes having your tools stolen or your premises and even your home office, if your business resides at home. damaged by a variety of reasons, such as water leaks. Your insurance covers the cost of replacing your lost equipment, meaning you can get back to work as soon as insurance covers the lost or stolen goods in your claim.
When would I need to get business contents insurance ?
If all you need for your work is just your laptop, you might be able to get gadget insurance for it, or include it in your home contents insurance (be aware some policies do not allow possessions used for business like your laptop, so make sure you check the small print).
If your equipment consists of more than just one item, then you should consider taking out business contents insurance.
Some possible situations that could lead to a claim include:
- Flooding
- Storm damage (including lightning)
- Fire
- Theft
- Vandalism or malicious damage
So what does business contents insurance cover?
It covers benefits that will vary between each insurance provider, but most policies will typically cover your tools and equipment for damage, theft, loss and vandalism.
You might also be able to insure your business contents for damage, loss or theft while they’re in transit and cover your stock in storage or while it’s being delivered to customers.
Some providers may offer business contents insurance as part of a general business insurance policy. These usually include :
– Public liability insurance
– Professional indemnity insurance
– Employers’ liability insurance
– Product liability insurance
– Commercial insurance
– Business buildings insurance
– Common claims examples
A fire in your premises… No one likes to think of something like this happening, but fires can and do start accidentally, unfortunately. What’s more, if your premises are in a busy industrial area, fire can start to spread very quickly. If this happens, replacing the contents of your office (including furnishing and tech equipment) can be expensive, so contents insurance can really help bring the office back in action.
Storm or flood damage to your premises. Similarly to the above, the contents of your business can also be damaged by a flood, including your electrical appliances. This can sometimes be just as devastating as a fire, and not having to pay out to replace all of your equipment can make a massive difference.
Break-in or theft of your tools. Unfortunately, businesses and tradespeople are often targeted by criminals in the area. Your premises can be robbed of valuable equipment or tech, and your tools can be stolen from your vehicle at any given opportunity. Business contents insurance can cover you for your losses if you were robbed.
Malicious damage or vandalism of your property. Some people cause damage for damage’s sake, therefore, if this happens to property relating to your business, your contents insurance will cover these expenses.
It’s important to note that, if you own the premises your business is located in, you should consider getting business building insurance too. Business contents insurance doesn’t normally cover damage to the fabric of the building, including roof, flooring, pipes and fitted fixtures.
What is public liability insurance ?
Public liability insurance is the type of insurance that protects you if your business becomes legally liable. For instance, if someone is injured or if their property is substantially damaged. It protects your business against legal costs and compensation claims if your business is to be discovered at fault.
Do I even need public liability insurance?
Public liability insurance is one of the fundamental forms of cover that very few occupations can afford to go without. It’s not a legal requirement, but lawsuits of this sort can affect nearly any type of business and leave you owing large sums of money.
If a public liability claim were to arise then you’ll need to cover both :
In some cases compensation may need to be filed if someone makes a claim against you.
This will involve the cost of your legal expenses, such as hiring a defence lawyer and court fees. Public liability insurance is designed to help you cover these expenses, for example, if an accident happens at your restaurant.
What industries would usually need public liability cover?
As mentioned previously, almost all businesses would benefit from this type of protection. Regardless of business size, public liability insurance is suitable if the business has a physical premise or operates in public, like a mobile business that’s on the go.
Here are some obvious examples:
Retail, this includes grocery stores, book shops and department stores that have physical locations with lots of foot traffic coming through, which can increase the chances of someone getting injured in the premises.
Health and beauty. Gyms, physical therapy centres and hair salons also bring the public into their public premises. Even solo professionals may need public liability if they carry equipment that could damage or injure a member of the public that comes for their services.
Hospitality, this includes restaurants, bars, clubs and cafes that bring in lots of people while also creating a fast-paced environment where injuries are more likely to occur.
The trades, for instance, any business or independent contractor operating on a worksite would benefit from public liability insurance, and in some cases are required by law or by contract to have this policy.
Entertainment, like dancers, performers, event organisers, etc.
Real estate e.g. landlords.
It’s important to remember that public liability will protect businesses in these industries mentioned above, if a situation occurs where they cause injuries or damage that are not related to the professional service provided.
How much does public liability insurance cost ?
The cost of your policy is entirely dependent on your business’s operations and circumstances. The insurer will analyse your business to determine the likelihood that any damage or injury could arise, and they’ll use that to calculate your premiums.
Depending on the nature and size of your business, the cost could be anywhere from a few hundred to thousands of pounds per annum.
This is what an insurer will take into consideration when coming up with your premium:
What your business entails. Some businesses simply attract more risk naturally. For example, the risk of injury or damage on a construction site will be generally higher than that of a retail store. Insurers will analyse what you do, then compare this to past claims or instances in that industry and factor this into your premium rate.
How upscale your business is. The larger the business, the higher the risk of injury or damage that will take place or you will encounter. Factors like annual turnover and employee count will affect your premium rate.
The location of your business. You can expect a higher premium if your business is in a high-risk location, such as an airport, construction site, or nearby a railway station.
The structure of your current policy. You can affect the price of your policy by choosing a higher or lower excess or higher or lower benefit limit.
Is public liability insurance tax deductible ?
A public liability insurance premiums are considered a business expense and are therefore tax deductible. Each year you’ll get a tax invoice from either your insurer or your broker, depending on who sold you the policy in the first place.
How to get cheap cover…
While you don’t want to skimp out on a product that could literally save you from millions of pounds in damages, there are still ways you can save some money. Here are some ways below…
Increase your excess. Your excess is the amount you’ll pay out-of-pocket when you claim for cover. If you agree to pay a bit extra, you can get your premiums decreased. Just make sure it’s an amount you could handle to pay if you ever had to claim.
Decrease your benefit limits. The benefit limit is the amount the insurer will pay you (or the one suing you) if you have to make a claim in a certain instance. The less they have to pay you, the cheaper your premiums rate will be. Remember that lawsuits can involve massive amounts of money, so consult with your insurer or broker before reducing the limits significantly. They can help you understand the potential risks you could face based on your situation and keep you from taking out too little cover.
Get a package deal for your cover. Public liability is just one form of business insurance, and chances are you would need several liabilities such as; building and contents, theft, product liability, etc. Business insurance is all about customisation, so it makes sense to go through one provider for everything so that they can customise your policy for your business.
What is employers’ liability insurance?
Employers’ liability insurance covers you and helps you to protect your employees in case one of them is injured or becomes ill as a result of any work they do regarding your business. You are legally required to take out this cover if you employ more than one person.
You must take out employers’ liability insurance if:
You deduct National Insurance contributions and income tax from the money you pay to all of your employees.
Where, when and how your employees work is controlled by you solely.
Any profits made by your staff can be claimed through you.
You provide your employees with most of the materials and equipment required to do their role.
You require each member of staff to perform the duties of their role they’ve been designated themselves, and they cannot hire a substitute if they are unable to work.
You employ part-time or temporary staff.
Failing to take out employers’ liability insurance could be costly to you, even if no claim is brought against your business. You could be fined £2,500 for every day that you’re not insured properly. Failing to produce an ELCI (Employers’ Liability Compulsory Insurance) certificate or not making it available to inspectors whenever they ask can also incur a fine of £1,000 and even more.
What does employers’ liability insurance cover ?
Employers’ liability insurance covers you against any claims by staff members who suffer an injury or become ill while performing duties for the course of your business.
This cover will take care of legal costs, as well as legal fees and compensation payouts, if a a complaint made by an employee goes to court.
The legal requirement for most businesses is to hold cover worth over £5 million. However, many policies include £10 million of cover as the standard cap. Businesses where staff face a higher risk at their workplace should make sure any cover taken out is sufficient for the needs of the business.
It is important to take note that claims can still be made even when a person is no longer employed by you, as certain illnesses or symptoms may develop over time. Check that your policy includes cover for these instances, as a precaution.
While you may not be legally required to cover volunteers, independent contractors and work experience students, some policies might offer cover for these types of employees in the business as well. This can be helpful, as claims may still be made against you.
Do I need employers’ liability insurance?
In the majority of cases, employers’ liability insurance is a legal requirement you must take.
- There are some exceptions to this rule however. If the following applies, you do not have to take out this cover:
- You own a limited company (Ltd) and the only employee also owns more than 50% of the share capital.
- Your company is not a limited company, but the only employee is a sole trader who is the core principle of the business.
- All employees in your companies are your direct family members.
- You and your business partners are directors of the company who have an equal share in the business and no other persons are employed.
- Your business is a public organisation, health service or government body.
- You might be exempt from employers’ liability insurance if any of the following below applies:
- You employ unpaid student workers, (work experience).
- Your staff are people in training programmes that are not directly employed by you.
- Your workers are volunteers.
- Your staff are work experience school children.
Employers’ liability insurance cost
The cost of a policy would depend on your level of cover, the size of your business and the individual’s requirements.
In many cases, employers’ liability insurance comes as part of a general business insurance policy, which often involves public liability insurance.
With some providers, you might even be able to include other elements of business cover in your policy, such as protection for your equipment and even van insurance.
Common claims instances
Injury to cleaning staff. One of your cleaners might fall over a piece of equipment or slip on a wet floor in your premises.
Falling from height. If your staff members work with ladders, scaffolding or cranes, or have to climb to dangerous heights while at work, they may fall and injure themselves greatly.
Exposure to dangerous substances. If you work with chemicals or any other damaging materials, accidents can take place, even if you take all the required precautions.
Injury caused to office staff. Prolonged and repetitive use of computer equipment can cause some health conditions, like back problems, muscle and joint pain or eyestrain.
Accidents in the office. Unexpected incidents, such as an item falling from a shelf, the ceiling collapsing or someone tripping over an obstacle may occur.
Whether the incident is your fault, the employee’s fault, or a freak accident, the staff member affected might have a case, therefore employers’ liability insurance is important for cover in the work premise, as claims can run up to millions of pounds.
