Business Insurance Terms Explained

 

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Credit Insurance

This protects you against customers who fail to pay their invoices. Because the risk of bad debt can be high, you would probably find it hard to get cover for this unless your business has been successfully up and running for some time.

Public Liability

This provides you with legal cover and protection against claims for which you would be legally liable for and brought to you by anyone other than your employees for bodily injury or loss or damage to property arising in the course of your business.

Professional Indemnity

This is for anyone starting a new business as, say, a business consultant (legal management, marketing, financial etc.) This protects you against your legal liability to compensate third parties for injuries sustained due to you or your employees negligence.

Factory Insurance

This usually covers you for machinery and equipment, as well as fire and theft etc. (policies will differ depending on requirements).

Premises Insurance

If you are going to buy the premises, or if it is a condition of the lease, this would cover you against fire or any other perils, such as, burst pipes storms etc. (check policy details).

Employers Liability

This is only required if you have employees. This insurance is to protect employers against claims for bodily harm or death brought to employees in the course of employment( this also includes injury by other employees, for whom the employer is liable). A certificate has to be displayed in a place that all can see.

Office Insurance

This usually covers you for computers, fax, printers, fire, damage, theft and files and records. (policies will differ depending on requirements).

Home Office

This usually covers the home office scenario: computers, fax, fire due to office equipment etc. Note: this will not be covered by home insurance.

Fidelity Insurance

This covers you for fraud or dishonesty by employees, it can be taken out for any amount of employees or the whole staff.

Shop Insurance

This usually covers you for building and content in the event of fire and theft etc. (policies will differ depending on requirements).

Key Person (Key Man) Insurance

This insures your business against the loss of a key employee through disability or death. The money can be used in any way by a business deems appropriate, not just to train/hire a direct replacement. Key person cover can also be used to cover partners in a partnership, or shareholders in a privately owned company. Key person insurance can be particularly important in small businesses, where there may only be one person trained for a particular job.

It is essential to talk to a specialist or advisor before taking out key person cover; as it requires a detailed knowledge and understanding of the business and employee roles.

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