What can you do to minimise risks?
Produced in partnership with Quotedesk
When it comes to the biggest business blockers, access to funding or lack of talent aren’t the only factors eating into your profits. It is unforeseen incidents that can stunt the growth of a business and in many cases, annihilate it.
Take this year’s floods. They cost small businesses a whopping £830m with the average cost to each business in flood-hit areas topping £1,500. According to the Association of British Insurers (ABI), insurance claims from businesses hit by the floods will reach £149m as more than 3,100 claims have been made to date. 
To protect your business against such incidents, you need to ensure you have the right business insurance to cover you. Nigel Palmer, director, Quotedesk, says that it’s essential for businesses to take risk management seriously to shield it from predictable and unpredictable risks.
“Whichever sector you operate in, it’s important to safeguard your business assets, employees and premises. Be it a workplace accident or a business slip-up resulting in a law suit, it’s important to get the right cover to protect your business and for companies to have a safety net in place to deal with risks and claims.”
So what types of insurance can minimise risks to your business this year?
Employers’ liability insurance
Employers’ liability insurance is a legal requirement for any business which has one or more employees. The insurance covers all permanent employees, contract, casual and temporary staff who are injured or become ill through work. This insurance, by law, covers at least £5m but some policies offer up to £10m.
Businesses that do not have appropriate insurance can be fined up to £2,500 every day.
Why is it important to have employers’ liability insurance? According to the Health and Safety Executive annual statistics report for 2012/13, 1.1 million people who worked during the last year were suffering from an illness they believed was caused or made worse by their current or past work.
Public liability insurance
Public liability insurance covers the cost of claims made by any members of the public for incidents that occur on your business premises. These include death, personal injuries and damage to property. This insurance, which covers both compensation payment and legal expenses, is considered a must-have for businesses that have visitors on their premises or employees who work on sites owned by clients.
Directors and officers insurance
A survey conducted by the Institute of Directors in association with the specialist insurance brokers Quantum has found that over a third of UK company directors feel more at risk than they did a year ago. In fact, directors and officers insurance accounts for $10bn in gross written premiums worldwide.
Despite being qualified and experienced, business executives may face situations where their decisions can causes losses in a company. This can result in costly legal battles with directors in question being personally liable for losses.
Professional indemnity insurance
The UK’s professional indemnity insurance market is projected to generate £2.33bn in premiums by 2017. This is because many professional sectors like engineering, marketing and IT are expected to make this insurance compulsory for businesses.
You may have the best interests of your clients at the heart of your business but there may be times when the client isn’t happy with the service provided. Professional indemnity insurance helps cover the cost of compensation if professional advice given by your business has caused damage to your client. This insurance helps protect professionals like lawyers, architects, accountants and financial advisers.
Individual and group personal accident insurance
In 2012/2013, 148 workers were killed at work and 78,222 other injuries were reported. This resulted in UK businesses losing a total of 27 million working days due to work related injury or ill-heath.
Businesses need to be prepared if a key member of staff suffers an injury from an accident and is unable to work. Individual and group personal accident insurance helps businesses get a weekly amount if work is stalled due to accidents.
Business interruption insurance
According to research by the Association by British Insurers, 80% of UK businesses suffer an incident within 18 months that causes disruption to businesses. Business interruption insurance covers the shortfalls of profits that businesses suffer due to incidents. It covers damage to the property of a business and allows a business to trade in the event of a material damage loss.
Many UK businesses are vulnerable to electronic crimes with cyber thefts costing UK companies around £2.99m a year on average,. In a survey commissioned by the Department for Business, Innovation and Skills (BIS) last year, 87% of small firms surveyed said they had suffered an online security breach in the preceding 12 months. The breaches cost UK businesses an average of £35,000 to £65,000 each. Cyber insurance covers loss or damage to digital assets due to security breaches.
It’s important to shop around to make sure the insurance you buy meets the needs of your business.
Nigel commented: “Quotedesk is part of the Arthur J. Gallagher (AJG) group. AJG was awarded the 2013 Insurance Times award for ‘Commercial Lines Broker of the Year’. The wider group gaining this award demonstrates we know our stuff. We don’t just sell the cheapest insurance policy to customers; we take the time to really understand their business, building a profile of that business and then using that to search our panel of the UK’s biggest insurers to find the most suitable product at the best possible price.
“And a business can trust us. In the event of the worst happening, we manage any claims from start to finish so settlements are paid with the minimum of fuss and disruption to the business.”
For more information or to discuss your business insurance requirements, contact Quotedesk.
T: 0845 073 8492
E: [email protected]
Produced in partnership with Quotedesk