Running a small business comes with a whole host of additional considerations, and one of the biggest should be insurance. Covering your business against the constant threat of claims being made against you is one of the most simple and effective ways gaining legal protection, should you ever need it.
Falling under the category of prevention being cheaper than the cure, getting in to a legal dispute without the correct insurance in place complicates matters in a fashion that isn’t worth discovering. Other than Employers’ liability insurance, which is required by law, there are additional policies worth considering, too.
With so many policies available though, it’s easy to get lost and lose sight of what you actually need, and why. Entirely dependent on what type of business you are, there are different areas that you should prioritise, but here is a short crash course in some of the most common policies available, what they cover and who should consider investing in them.
1 – Product Liability Insurance
Product Liability Insurance protects against claims for property damage or personal injury caused by a product your business sold, supplied or designed. Even if you weren’t the manufacturer behind the creation of the faulty product, you could still be liable regardless.
Obviously, it goes without saying that manufacturers of anything being sold or used by the public should take out this cover as a matter of priority, but actually it’s a sensible option for anybody in any kind of public facing business.
You should consider whether or not your business name is on any products, you’ve repaired or made alterations to the product in question, the product hasn’t got a clearer indefinable manufacturer or said manufacturer has gone out of business and whether or not the product has been imported from outside of the EU – because in any of those cases, this insurance could be of some use to you.
2 – Professional Indemnity Insurance
We exist in a particularly litigious environment, so should a third party raise a legal complaint against your business as a result of error, omission or negligent advice, the most straightforward way of covering yourself against that is with professional indemnity insurance.
Given the nature of the law, you can be at risk of a lawsuit whether or not actual negligence or error has taken place, because even the perception of it is actionable. So if your business is providing advice and guidance, or you’re part of a consultancy, recruiting or tutoring – even if you’re a freelancer or personal trainer – this cover can help protect you against any claims made against you or your service.
3 – Public Liability Insurance
Public liability insurance covers the cost of legal action and compensation claims made against your business if a third party is injured or their property suffers damage whilst on site at your business, if you’re remote and working in their home, office or property of their business. Additionally, this would also cover any costs incurred by the NHS where medical treatment and transportation costs are concerned, as they would also be able to claim against your business.
If you’re business is reliant on either visiting client’s properties or businesses, like a painter and decorator or electrician, or your clients visiting your place of work, perhaps a beautician, hairdresser or run a small café or bar, than this is something to seriously consider.
There are different levels of public liability cover which you should investigate further, tailoring the policy to your own needs, before purchasing, but given the very nature of accidents, it’s far safer to have something in place in the event of something happening unexpectedly, rather than opening yourself up to any further legal troubles.