Rights to pay
In the UK businesses are required by law to hold a minimum of insurance as detailed below. There are also other types and levels of insurance that are prudent to obtain but are not legally required.
Required Insurance for UK Businesses
Employers Liability Insurance
- UK law requires that all businesses that employ even one employee take out Employers Liability Insurance. In the case of a limited business the owner/director is considered an employee so even if you are the only one working for the company, if it is registered as an LTD, you must have the minimum amount of Employers Liability Insurance or risk facing prosecution.
Each year in the UK nearly 30,000 major injuries and 400 deaths occur in the workplace or as a result of work-related activities. Having Employers Liability Insurance protects your business in case an employee's illness, injury or death is deemed to be a result of their work, making the company liable.
- Not all motor insurance policies will cover work related motor accidents. If yours or your employees' doesn't then you will need to obtain motor insurance that specifically covers work related driving.
Other Business Insurance
- Public Liability Insurance is not required by law but many businesses require it when dealing with other companies and may not enter into contracts, or even trade with you, unless you have it. If you are renting space in an office building or commercial premises you will find that many of them will require you to have Public Liability Insurance.
- If your company offers any type of product either to the public or B2B then you should have Product Liability Insurance in case a faulty product causes injury or damage. Even if you are not the manufacturer but you supply the product, the liability may fall on you.
- If your company provides advice or professional services of any kind you are liable to be sued if a client believes they incurred a loss due to bad advice or negligent services that you provided. Professional Indemnity Insurance covers you against such an eventuality.
Property and Buildings
- You can either take out basic Property and Buildings Insurance or the more inclusive All Risks option which provides cover against the standard fire, lighting and boiler explosions, as well as perils such as malicious damage, water damage, storms and floods, impact by vehicles and aircraft, explosions and riots.
Business Assets and Equipment
- Also referred to as Contents, this type of insurance protects the business against theft (from non-employees). You can choose either the more expensive Replacement as New option or the cheaper Indemnity option which takes wear and tear of the stolen item into account upon settlement.
Business Assets and Equipment Insurance usually comes with further optional extras:
Engineering Insurance is for mechanical and electrical breakdown of machinery and computers. The law required that some machinery, such as lifting machinery, lifts and boilers, must undergo a regular inspection by a qualified person.
Money Insurance covers cash, cheques, negotiable documents and even postage stamsp. The amount of coverage required and limits on settlements will differ for money kept on the premises during and outside of business hours, kept in safes, at the directors' residences and in transit.
Business Interruption Insurance
- This optional cover compensates your company for any profit loss and additional expenses caused by property damage severe enough to disrupt normal business.
Key Personnel Insurance
- If your company has an employee that is considered a key person and would be difficult to replace, this cover insures the business against the financial impact of loosing them to accident, illness or death.
Goods in Transit Insurance
- Covers your company against damage or loss of goods while in transit either in your company's vehicles or in those of a courier.