Types of Insurance Cover
Making sure your retail outlet or business is adequately insured against every eventuality can be a daunting task. Knowing what cover you need and what it protects you against can be confusing. Here at Alan & Thomas, we aim to make the process as straightforward as possible for you - our expert advisers will guide you through the process every step of the way.
A number of different types of insurance covers are listed below for your information.
If you have any questions or queries, we would be delighted to help you. Please call to speak to one of our advisers on 01202 754900.
If through the activities of your business you come into contact with third parties, you should consider having legal liability insurance in place. This cover will protect your business against any claims which could be made against you for compensation for accidental injury to property or third parties, where you may be deemed negligent. If a claim is successful, you could be liable to pay any compensation awarded. Having legal liability insurance would mean that your insurance company would pay the compensation award and associated legal costs. Without this type of cover in place, the legal fees alone could cost your business thousands of pounds.
For example, if a customer were to slip on a wet floor on your premises, they could accuse you of poor building maintenance and subsequently bring a successful claim for compensation against you.
Formerly known as 'key person insurance', revenue protection insurance can provide financial support when a key member of staff is unable to carry out their normal duties, leading to a drop in revenue for the business. A key person may be one highly skilled individual or a team of employees; anyone who is integral to the output of the organisation.
Revenue Protection Insurance can offer a business long term financial security against the unexpected, as well as the peace of mind you need when running a business that is reliant on key individuals or teams.
Asset protection insurance is held in trust on behalf of your business and provides financial protection for your personal assets. In its simplest form, it could be described as a ring-fenced financial reserve that can only be called upon when a PI insurance policy is not sufficent enough to cover a sizeable claim.
Asset Protection Insurance not only gives you long term financial security against the unexpected, but it also provides you with the peace of mind you need when running a business.
Protecting the people that work for you is absolutely vital in any form of business. Employee protection insurances are designed to provide financial support to members of staff that suffer serious injury or illness, or a fatal accident.
This type of insurance is suitable for anyone that is employed or self-employed and looking to safeguard their earnings. Some professions are naturally more risky than others, for example builders who work at heights or workers who operate heavy machinery. Employee protection insurance guarantees your financial security in the event of an accident or illness.
If you own property as part of your business, this insurance covers your buildings, general contents (including any stock), computer equipment, tenant improvements and glass (for which you are responsible) against accidental damage (including theft) whilst on your business premises.
For example, if your shop/office was flooded and you needed to replace items of furniture and equipment, this insurance would cover you for the cost.
Specified All Risks
You can also choose a specified all risks cover, which will provide insurance cover for items whilst away from your business premises, for example, laptop computers, mobile phones, promotional brochures or other business equipment. Cover can be arranged to cover items in Europe or Worldwide.
For example, if a laptop computer was dropped and damaged whilst being used at another office, your insurer would reimburse you for the cost of replacing it.
This insurance would cover your business if any of the following were to break or fail to operate - central heating or air conditioning systems, boilers, lifting equipment, security and sound systems, computers, photocopiers, point of sale and other office equipment.
For example, your air conditioning unit fails to work correctly during the hottest week of the year, which could result in loss of custom. With this cover, you would be able to claim money from your insurer to replace the equipment.
Business Interruption Cover
Business Interruption insurance is taken out to cover your business if you are unable to partially or fully carry out your day-to-day activities and subsequently suffer a loss of revenue caused by damage to your premises or those surrounding you, failure of public utilities, discovery of vermin or pests, specified diseases, food poisoning, murder or suicide.
For example, your shop/office may be damaged by flood. Planning permission to rebuild may well take more than six months to be granted and during this time, you may have to rent a temporary retail outlet, purchase new equipment or cancel any special events due to be held at your premises. With full business interruption cover in place, you would receive compensation for each of these areas.
If you attend events or exhibitions to promote your business, cover can be organised for event cancellation, liabilities for employees, volunteers and the public, as well as equipment away from your premises and while in transit.
For example, you may be exhibiting at a national event to promote your business and one of the electric cables on your display stand comes loose and a passing member of the public trips over it . They could then sue you for personal injury arising from your failure to secure the cable securely. This cover would pay your legal costs and expenses, as well as any compensation awarded to the claimant.
Goods in Transit
If your business is involved in transporting goods or stock, this policy will ensure they are covered against loss or damage while in your vehicles or when sent by carrier.
For example, if you are delivering goods to a customer and during their transit, the vehicle in which they are being transported catches fire and the goods are destroyed, this insurance cover will reimburse you for your loss.
Money & Personal Accident
Any business money that is lost or stolen from your business premises, your home, an employee’s home or whilst in transit, will be covered by this policy. This includes cash, cheques, postage stamps and certain other negotiable documents. Compensation will also be provided should an employee sustain an injury during a theft or attempted theft of money.
For example, if an employee was assaulted whilst transporting the day’s takings to the bank, this policy would pay compensation to the organisation or the employee.
If you rely on a computer system to successfully run your business, you should consider computer cover. This cover is more comprehensive and would cover you if you suffered a serious incident that stopped your day-to-day activities. This insurance has fewer warranties and exclusions, and will help you to get your business up and running again as quickly as possible.
For example, you may employ a temporary working in your office/shop during a busy period who is unfamiliar with your standard working procedures and who subsequently fails to back up important files leading to a complete loss of all your data or your firewall could fail and your stored data becomes corrupted.
With such wide ranging legislation in place these days related to employment, any breach can lead to an employee - current, former or potential - bringing a case against your organisation. Having Legal Expenses insurance covers your business for legal fees, compensation awards or appeal costs you may incur during an employment dispute.
For example, if you dismiss an employee and are later found not to have followed the correct disciplinary procedure, the former employee could bring a claim against you for wrongful dismissal. The costs of defending the claim would be covered by this insurance.
If an employee covered by the Personal Accident policy was to suffer a bodily injury from an accident or assault whilst at work resulting in temporary or permanent disablement or death, this cover will provide a financial payment to your business. This can be used to help aid their recovery or cover their absence.
For example, if an employee suffers an accident whilst at work and this resulted in them being unable to attend and carry out their duties for six months, Personal Accident insurance would make regular payments during the time that they are unable to work. A lump sum payment can be made should the individual suffer a serious injury or permanent disability.
This insurance protects your business against the loss of money, goods or property, which you may suffer as a result of a dishonest or fraudulent act by an employee or volunteer.
For example, an audit of your accounts uncovers an anomaly which is then traced back to an employee of the business who had been taking funds for their own use. This policy would pay out if you are unable to recover the funds.
If your business provides advice and guidance to others, you should consider including Professional Indemnity insurance cover in your programme of insurance. This would cover the cost of defending your business against allegations of professional negligence, such as giving poor or incorrect advice to a user of your services.
For example, if a client accuses you of giving poor advice and as a result they suffer personal injury, property damage or financial loss as a result of the incorrect advice you gave, they could pursue a claim against you for compensation. Having this insurance in place will cover any payout awarded to them if the claim is successful. The policy can also include associated legal costs.
If you have vehicles that are used by employees on behalf of your business, you will need to have motor insurance cover in place. There are three types of cover – comprehensive; third party, fire and theft and third party only.
For example, your employees may need to travel between your offices or shops to carry out their duties. If they were involved in a road traffic accident en route, this insurance would cover any damage to the vehicle and any compensation awarded to the driver and/or passengers should they sustain a personal injury.
If your employees travel throughout the UK and abroad on business, cover can be organised to include cancellation and delays, medical emergencies, equipment and possessions.
For example, one of your employees may be taking a trip to meet with a new supplier. They arrive at the train station to find their train has been cancelled until the following day due to bad weather. This cover would pay for any overnight hotel stay and the cost of a new ticket if required.
This cover provides businesses with protection against financial loss resulting from the loss of personal and/or business data. This could be the loss of a single laptop or file to the hacking of your company’s website or network. If your business handles data – whether relating to employees, suppliers, customers, clients or other partners – you are obliged to take effective measures to ensure that data is safe and secure.
For example, if one of your employees had their car broken into and their laptop was stolen which contained your client database, this cover would compensate you for replacing the laptop and managing any issues that subsequently arise from the breach of data protection.
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IPT (insurance premium tax) has doubled from 6% to 12% over the last few years, which has forced insurance premiums up in turn for customers and now accounts for £50 on an average policy. Though IPT only directly affects insurers, this is likely to have a knock-on effect to your business insurance policy.