What commercial insurance do I need for my business?
The type of business you run will massively affect the commercial insurance you need in place, which is why it can be helpful to speak to a specialist broker who will be able to advise you.
These are some of the things you might need to consider when taking out commercial insurance.
1. How large is your business, and how many employees do you have?
This could affect the level of employers’ liability insurance you have in place, if you need any at all.
2. What type of business do you run?
The nature of your business is very important when considering what cover you need, and some types of businesses will be deemed riskier to an insurer than others – a tattoo studio would usually be considered a higher risk than a newsagent, for example.
Do you deal with the public, either in person or over the phone, providing products and services? If so, you’ll probably need some form of public and products liability insurance in place to protect yourself against potential compensation claims.
Equally, if you’re giving advice (such as legal advice, management consultancy or similar) then you’ll need some form of professional indemnity insurance in place.
3. Do you run events as part of your business?
Whether you run promotional events on a regular basis or only once a year, it’s important to let your insurer know the details so they can assess any additional risks involved with the activity.
For example, if you’re running a fundraising event in a public place, your insurer may request that you have additional security in place for the event to mitigate certain risks, such as vandalism.
Equally, if the event you’re running is outside the scope of your normal business activities - such as a bake off that provides food for public consumption when you usually run a consultancy business - you may need additional liability covers in place.
Cover for events can either be included as part of your commercial insurance package, or some insurance companies do provide one-off event insurance.
4. Do you own or rent the building your business operates from?
This will affect the commercial property insurance you need to have in place – if you rent or lease the property, you will likely only need to cover the contents that you own inside the premises. Check your tenancy or lease agreement to find out what your responsibilities are.
Your insurer will also want to know whether you own, lease or rent equipment for business use, as this will also affect the level of commercial contents insurance you need in place. You may also need to add your lease company as a note of interest on your commercial insurance policy, so check your lease agreement to find out what’s required.
5. Do you carry out business abroad?
Your insurer will need to know where you and your employees work, as well as what legal systems you may need to operate under so they can make sure you’re properly covered. This includes carrying out contracts for companies that are based abroad, even if you never set foot there yourself.
This will also be a consideration from a data protection perspective, as GDPR stipulates that only data transferred within the European Economic Area (EEA) will be protected under the regulations.
6. Do you handle sensitive customer or client data?
If you handle sensitive client data, cyber insurance can protect your business against the negative impacts of a data breach. Essentially, the more data you store, the higher the risk. And with fines of up to €20 million or up to 4% of your annual global turnover for an infringement of the GDPR regulations, it’s never been more important to make sure you have strict data protection processes in place, as well as a robust cyber insurance policy to protect your business against the fallout of a data breach.
They may also want to know if you run your own website, or rely on IT systems to run your business. Not only is this is a cyber insurance consideration, but could affect whether you need to have business interruption insurance in place. After all, a bug in the system could interfere with normal business operations for days, or even weeks.