Insurance Basics For Business
How do you arrange insurance?
Your insurance can be arranged through an insurance agent or an insurance broker. An agent is someone tied to specific insurance products or companies; a broker is a dealer who acts as your representative to locate the best deal for you and who earns a commission from the insurance company eventually used.
You can sometimes take out a cover note for temporary insurance until you have finalised your insurance needs. The cover note will usually provide cover for a month.
Obtain quotes from different agents and brokers and get an agent or broker to do a risk assessment of your business. There usually is no charge for this type of service.
Your agent or broker may arrange all your insurance needs in a single package for your convenience and cash-flow. They will then lodge your proposal with the insurer(s) and if accepted the insurer will issue the policy.
Types of Business Insurance
The following is a summary of some of the more common insurances and in which we recommend you review your needs regularly with your broker or agent:
Loss of Profits
If an ‘event’ occurs that interrupts normal business operations this type of insurance will indemnify the business against any loss of profits the business may suffer by paying wages, fixed costs, increased manufacturing costs and so on.
Covers the assets of your business from physical loss, damage or destruction.
Protects you from claims to which you are legally liable as a result of being sued for careless maintenance of your property or business premise.
Product Liability/Professional Indemnity
Similar to public liability, this protects you from being sued due to faulty or defective products sold, or for careless performance of services.
Sickness and Accident
Covers sickness and accident to the business owner. If you are self-employed you are not covered by worker’s compensation, so this insurance cover should be seen as a must.
It is a legal requirement that every employer obtains workers compensation for their employees. Essentially, it provides the employee with a safety net of wage payments if they have been injured at work.
Indemnifies the business against the loss of an employee due to death or disablement where that loss would result in a serious fall in business profits.
The above is not an exhaustive list. Other types of insurance include fire, special risks, motor vehicles, electrical or machine breakdown, computer damage, marine (not fish insurance but goods in transit), motor vehicle, worker’s compensation, burglary, glass breakage etc.
We are not insurance agents or brokers or experts in insurance in any sense. However, the above has been put together for your general consideration. If you have any queries, we ask you to please seek professional assistance.