Business protection and business insurance can be confusing for many. Here are some answers to common questions on the differences between the two, what they cover and how they can help protect your business.
What is Business Protection?
Business Protection is an insurance policy that helps business owners to plan and protect themselves as well as their ‘Key’ employees in the event of an unexpected illness or even death. It will enable a business to cover the costs of recruitment, job cover, or sick pay which could help the company to provide additional personnel support and to help the business continue to trade and function in and during such an event. It can also protect the repayments of a business loan should the business need to cease to operate. The specific agreement will vary depending on the nature of your business.
Do I need Business Protection?
Business protection for small businesses is common, as certain employees may be less easily replaced due to their intimate knowledge of the business’s specific operation and particularly if they account for a larger portion of the overall workforce.
Larger businesses can also benefit from business protection too, especially if there are key projects that rely on certain individuals for their skills, leadership, or strategy. As a business grows and expands, owners may begin to think about protecting themselves should an issue occur with their product or service.
Owners may begin to ask:
- ‘what business protection do I need’
- ‘how do I protect my business?’
An additional question you may ask yourself is:
- ‘how do I protect the family of my business and guarantee fair market value – for the benefit of my loved ones?’.
As the business grows, the value can change considerably, and this is where a Business Protection policy could help.
Here are some answers to common questions on the differences between business insurance and business protection, what they cover and how they can help protect your business.
What is Business Insurance?
Two of the main types of business insurance are public liability insurance and employers’ liability insurance. The former protects a business if their activities damage someone else’s property or cause harm to a person, while the latter protects a business from compensation claims if an employee becomes ill or is harmed while on the job.
There is also product liability insurance, which can cover compensation due to property damage or harm caused from a product and professional indemnity insurance, which can cover claims for things like breach of confidence, professional negligence, defamation, or loss of information.
Do I need Business Insurance?
Employer’s liability insurance is a legal requirement for all businesses who have employees, even if it’s just one person. There are exceptions if all your employees are direct family members, or all employees are based abroad, but broadly every employer will need this insurance.
Public liability insurance is not legally required but is always good to have, especially if a business operates with anything that could be considered dangerous or is likely to impact others, like construction or farming. Some companies and organisations will not work with businesses without it, so if your business could be considered dangerous it’s a near necessity.
Other forms of business insurance will depend on the kind of business you own and the risks associated with it. If you sell products, then product liability insurance may be for you. If you provide services, then professional indemnity insurance may be more appropriate.
As independent Insurance & Protection advisors and brokers, we at David Williams IFA Mortgage & Insurances Services can assist in finding the best business protection solutions that will suit your business needs. Contact us online today or give us a call on 01604 250280.
David Williams IFA Mortgage & Insurance Services Ltd (FRN:597007) is an appointed representative of David Williams IFA Ltd (FRN:530750) which is authorised and regulated by the Financial Conduct Authority.