5 Questions to Ask Your Insurer

It's an expensive time to run a small business and, as an entrepreneur, you're always going to want to make your money go further in this climate. Business insurance is one area where business owners are allowed to seek out value but be wary: this shouldn't be at the expense of coverage. The last thing you want to do is pay out on a claim which doesn't fall under your half-researched insurance policy...

If you're in the market for insurance covering your business or looking to make changes to existing policies, here are five questions to ask your insurer.

#1 What is the total amount of cover provided?

A small business should always clarify - and clarify again - the amount of coverage provided under their policy. Operating under the illusion you have a high level of coverage when in fact you have taken out a basic package can be extremely costly. Example: a professional indemnity settlement of £1 million plus legal costs to a claimant could be devastating to business who only has £100,000 of professional indemnity cover.

#2 Does this include legal costs?

While you may be covered financially for any compensation that needs to be paid, it is highly recommend you ask your insurer whether your coverage includes legal costs. These costs can often spiral to the point where they are more than the compensation damages so it is well worth seeking out coverage which bundles legal costs. If not, you may find your business pays an extraordinary amount in the event of a claim regardless.

#3 What type of insurance is a legal requirement?

Some policies can be absolutely essential for small businesses but they are not mandatory - with the exception of one. Employer's liability insurance is a legal requirement if your business employs one or more workers even if this is on a part-time or short-term basis.

Firms which fall under this category but do not own employers' liability insurance can face fines of up to £2,500 for each day they are not covered. Don't chance it.

For more information on your responsibilities as a business have a read through the Employers’ Liability (Compulsory Insurance) Act 1969.

#4 Do I need special cover?

That all depends on the industry in which you operate. Some insurers can offer special 'packages' that can be tailored to suit your business. For example, a dentist surgery will need a number of policies in order to adequately protect itself financially (professional indemnity, medical insurance) while hair and beauty salons could require a completely different set of commercial insurance policies (theft, equipment insurance). Brokers can ensure these types of businesses get the coverage they need to operate with peace of mind.

#5 Can I get a policy that combines different types of insurance?

Of course. Combined liability insurance is a single policy that covers the three main types of liability - employers', public and products.

Even then, a business might need more than simply public liability or employers' liability insurance. Small business owners can often sit down with an insurer or broker and bundle policies such as property, liability, rent guarantee, office, travel or any other types of coverage that is applicable to the day-to-day running of their business and see significant savings.

Could you save money by asking yourself these top tips from Businessinsure before securing or renewing your insurance policy?



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Wednesday, 17 July 2019
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