It’s only when something goes seriously wrong that you wish you’d taken out the appropriate insurance and it’s not just small firms that get caught out; in 2011 Sony lost $171 million as a result of a hacker breach that could have been covered under insurance.
We recently talked about Public Liability Insurance (and the reasons why it’s worth getting), which covers the costs associated with a member of the public, customer or client having an accident in your premises, as explained here. There are also a number of other insurance policies of which you should also be aware of.
The Employers Liability Insurance is the only mandatory business Insurance under UK law and is a legal requirement even if you only employ one person. It protects you against the cost of compensation claims should a member of your staff become ill or injured while working for you. You must be insured for at least £5 million and your employees must have access to a copy of the policy. You can be fined up to £2,500 for any day that you are without the policy and up to a £1,000 for failure to make the policy accessible to your employees. Any interruption to your business will cost you money and even a short secession of your business could have a serious long-term impact on your profits. It’s easy to be wise after the event but a serious consideration of the impact of worst- case scenariosis far more prudent.
Professional Indemnity Insurance
Sometimes confused with Public Liability Insurancefor the good reason that there is the potential for overlap with these two policies. Like Public Liability Insurance, Public Indemnity Insurance (PI) covers you against claims from clients but it is specifically designed to deal with claims arising from an actual or alleged breach of professional duty. Areas covered could include problems with advice given or designs submitted, loss of data, breach of copyright or confidentiality, libel or loss of client money or goods.
Business Interruption insurance
Many businesses assume that because they have Property Insurance that they don’t need Business Interruption Insurance, but the two policies are not synonymous. Business Interruption Insurance covers loss of income that a business suffers after a disaster, which in the UK usually means fire or flood. Property Insurance only covers damage to property and equipment whilst Business Interruption Insurance covers loss of profits, everyday operating expenses, costs of a relocating to a temporary location, costs involved in the retraining of staff on new equipment and any other additional expenses. If the possibility of a disaster striking your business seems remote, then consider how easily a pipe can burst or a water tank flood.
This is a rapidly developing area of insurance which needs your careful consideration. Attacks on businesses of all sizes continue to increase. The threat might come from hackers, criminals, insiders or even nation states. Cyber insurance can offer cover for costs such as business losses, lawsuits and cyber extortion such as ransomware.
Key Person Insurance
Whilst no amount of money will ever fully compensate for the loss of a key individual within your organization, this cover will help reduce the financial impact.