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Business insurance – a simple guide to the choices available

If you work for any professional company, you will understand the importance of maintaining high standards to keep the clients happy. Things don't always go to plan however, and this is where professional indemnity insurance comes in handy. Should a client take issue with the work your company has done for them, your business can be protected by any claims brought against it.

Business insurance has become increasingly important over the past few years in line with the ever-growing compensation culture, with the Confederation of British Industry one of the organisations to criticise the 'have-a-go' mentality that many UK companies have faced. Instead of dealing with problems which already exist, companies are being encouraged to focus on dealing with any future issues which may occur – something that business insurance can help protect against. Professional indemnity insurance, which is also known as PI insurance as well as indemnity insurance, is particularly useful if your organisation has to pay to rectify a mistake or cover any legal costs incurred due to professional negligence – such as a work-related mistake or giving incorrect advice.

How can you tell though whether professional indemnity insurance is right for your organisation? Well, it is worth considering if you regularly give advice to your clients. Are you willing to take the risk of one day giving the incorrect advice and your client taking legal action? If you handle data belonging to a client or business, are responsible for a client's intellectual property or provide a professional service that can be challenged, it is certainly a sensible move to make sure insurance is in place.

Even if you are totally confident in your work, small businesses in particular can be exposed to claims of negligence if a client's professional expectations are not met – something that could cause serious financial problems to the detriment of the business.

The compensation culture is not the exclusive preserve of clients: any small business will understand the importance of taking care of its staff, and this extends to meeting health and safety requirements to ensure that risks are minimised to employees. Depending on what industry you work in, an injury at work may be more of a possibility than for others. Thankfully deaths and serious injuries in the workplace have declined markedly over the past three decades. In 2009, 180 people in the UK died at work. In 1974 this figure stood at 651. According to the Health and Safety Executive, 151 workers were killed between April 1 last year and March 31 this year – a record low and 27 fewer than the total record for the same period 12 months previously. While progress is clearly being made, there is still plenty more work to be done. Not only is it absolutely vital for a business' employees to be safe whilst at work, companies who do not implement adequate health and safety measure risk losing a lot of money by being sued.

For this reason, small businesses are obliged to take out employers' liability insurance, something which is now a legal requirement in Britain. This is a sensible move – it only takes a moment's thought to consider how easy it is for an employee to suffer an injury. Whilst the construction and engineering sectors have obvious hazards, something as trivial as tripping over a computer cable in an office can trigger an employers' liability claim.

Not every small business needs this type of insurance – if, for example, you have no employees, are a family-run business or are closely related to your staff, then it isn't necessary – but it is wise! Public organisations such as government departments or bodies of the NHS are also exempt, but they will have in place alternative insurance arrangements.

Have you ever been to a client meeting and spilt drink over their computer? Accidents such as these, despite being trivial in the great scheme of things, can trigger a compensation claim against your business. With mishaps all too common place, it is important that small companies consider public liability insurance. Just about anyone who experiences an accident as a result of something in your business or one of your employees has done can issue a claim, but fortunately public liability insurance can help protect your business financially in the event of getting sued. This type of insurance will cover not only any damages awarded, it will also cover legal fees, costs or expenses incurred. If the person making the claim has been injured, the NHS is perfectly entitled to claim any costs – from ambulances to hospital treatment from your business – a little known fact.

Public liability is not a straightforward insurance. It is important that small business owners speak with an insurance professional in order for them to understand the conditions, warranties and exclusions which apply. A call to Westhill Insurance Services will provide you with all the information you need for all types of insurance, so if you are setting up a small business or are thinking of doing so, give us a call and let our friendly and professional team give you the advice you need. For example – whilst public liability is generally optional, horse riding establishments are required to take out a policy: now that's the type of detail you need to be made aware of when looking at insurance, so make that call to Westhill Insurance!

Whether your business is established or just starting out, advice is all important every step of the way – and as an independent insurance company, Westhill can shop around to find you the best possible deal to meet your needs. Not only will this afford you peace of mind, you may save your business a great deal of money should the unforeseen happen. The devil's in the detail – so make sure you are covered every step of the way.

If you'd like to read our product information regarding Business Insurance please click here.

Contact Westhill Insurance Services, today.

Posted on 22nd June, 2012