insurance

an introduction to business insurance

Adequate insurance is not a luxury; it is an absolute necessity. People are not afraid to seek compensation. No win no fee advertisements encourage claims and businesses need to protect themselves against liability claims that could run into millions of pounds. In addition you could be held personally responsible and even face criminal charges if found negligent. Most small businesses are failing to insure themselves against potential legal action from employees and you should contact an insurance broker to discuss your needs.

Select a broker on the British Insurance Brokers’ Association (BIBA) website or the Institute of Insurance Brokers (IIB) website. Insurance brokers and advisers are regulated by the Financial Services Authority (FSA), so make sure yours is registered by checking him or her on the FSA website. If you decide to skip the broker stage and deal directly with an insurer you must check the insurer is a member of the Association of British Insurers (ABI). Again, this is easy to do on the ABI website.

Take all feasible steps to reduce the likelihood of a claim - in particular make sure you have a robust health, safety and environmental management system. See Duport’s articles on Health and Safety for extra advice.

Hiscox, a leading specialist insurer found that fewer than one in five small businesses (18%) have Employment Practices Liability Insurance (EPLI), which protects employers against costly discrimination claims brought by employees. The survey found that only 15% of SMEs have Directors & Officers’ (D&O) insurance. Such cover protects company directors personally for claims brought against them in their capacity as a director or officer of their company. Smaller businesses can be just as vulnerable to D&O claims as multi-nationals.

The survey found that 10% of SMEs have suffered financially in the past because of a loss that wasn’t insured, with the average loss being £14,400.

The most popular business insurances among SMEs according to the Hiscox survey are:
1. Public liability (80%)
2. Office contents and computers (66%)
3. Employers’ liability (66%)
4. Professional indemnity (59%)
5. Buildings (58%)
6. Motor (52%)
7. Portable equipment (49%)
8. Legal expenses (46%)
9. Business interruption/loss of income (44%)
10. Consequential loss (30%)
11. Health (28%)
12. Product liability (25%)
13. Travel (22%)
14. EPLI (18%)
15. D&O (15%).

Find a broker you are happy with and if you want Duport to put you in contact with someone who can help you with your specific business needs please contact us. Also, take a look at the websites below.

www.biba.org.uk Select a broker: British Insurance Brokers’ Association (BIBA)

www.abi.org.uk Check the insurer is a member of the Association of British Insurers (ABI)

www.iib-uk.com Institute of Insurance Brokers' website. Use to search for a broker.

www.fsa.gov.uk Financial Services Authority (FSA) Use to check the insurance broker is regulated by FSA

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