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Insurance

Tue, 09 September 2003

It is a good idea to discuss your requirements with a registered insurance broker.
Below are some of the types of insurance that you might need to purchase when you are considering renting or purchasing workspace.
 
Public liability
Provides protection against claims brought by people other than employees (whose claims are covered by Employer’s liability insurance). The policy should cover bodily injury, loss or damage to property brought about by the operation of your business, and also any legal costs that might be incurred while defending against such claims.
 
Employer’s liability
This is only necessary if you employ staff; sole traders, or businesses that are run exclusively by partners, need not take this cover out.
 
Employer’s liability insurance covers you against claims brought by, or on behalf of, employees who have suffered death or bodily injury sustained in the course of their employment. If you have Employer’s liability cover, then the certificate must be prominently displayed in the workplace. (Claims brought by people other than employees are covered by your Public liability insurance.)
 
Product liability
Covers the cost of defending against any claim that should arise from injury, loss or damage caused by products you have sold, supplied, serviced or tested.
 
Professional indemnity
Protects consultants against claims made by (eg) clients for injury, damage or loss to their person or business due to professional negligence by you or your employees.
 
Premises
Make sure that your premises is covered against the usual perils, such as fire, storm damage and so on. If you have any plate glass windows, check that they are also covered. (This is likely to require a separate policy; do not assume they are automatically covered on your standard ‘buildings’ policy.)
 
If you are working from home, discuss the situation with your insurer. Your existing domestic policy may be insufficient, or even rendered invalid by your actions.
 
Stock, fixtures and fittings
Go for a ‘replacement’ type policy when covering your stock, fixtures and fittings and be careful not to underestimate the value. The policy should cover losses due to theft, vandalism, fire and flood. Taking a policy that covers only the depreciated value of what you lose may leave you with a serious shortfall when you come to replace stock, fixtures and fittings following an incident.
 
Plant and machinery
If you have plant and machinery that requires a regular statutory inspection, it is usual for this to be undertaken by a specialist engineering insurer.
 
If you lease equipment, or are buying on hire purchase, you will be required to take out insurance to cover the value.
 
Business interruption
Should, for example, your premises be damaged by fire, then there will most likely be an interruption to your business while repairs are carried out or new premises sought. Your other policies will cover the damage and loss to physical assets; business interruption insurance is intended to compensate you for the reduction in your turnover during the period of interruption.
 
Vehicle
Check that your motor insurance policy covers you for business use. If you use your car, for example, for any purpose other than travelling to and from your regular place of work each day, then you need special business cover. Some insurers provide this cover fee of charge on request, others will levy a charge.
 
Money
If you handle cash or crossed cheques in significant amounts, then you should insure against theft, either on the premises or in transit to and from the bank. Take care to comply with any conditions of the policy, eg you may be required to have two people accompany cash in transit, and so on.
 
Goods in transit
This is likely to be necessary if you intend to carry goods. Your motor vehicle insurance is unlikely to cover this. The policy will cover stock and supplies in transit to or from customers and suppliers.
 
Glass
If you have plate glass windows or other fixed glass, it is unlikely to be covered on your standard ‘buildings’ insurance. Make sure that you have a policy that covers the cost of replacement, which can be very expensive.
 
Engineering
If you have plant and machinery that requires a regular statutory inspection, it is usual for this to be undertaken by a specialist engineering insurer.
 
IT and communications
Insure your hardware and software against perils such as theft, fire and flood, and make sure that your policy covers you for ‘replacement’ value rather than reimbursement of the depreciated amount, which could leave you with a shortfall when you come to replace damaged or stolen items.
 
Data
Generally applies to data held on computer. If, despite your adequate precautions, data is lost, the cost of recovery can be significant. If your business relies heavily on such data, it might be prudent to take out insurance.
 
Frozen food
Covers against loss of stock due to breakdown of equipment or interruption to power supply.

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