Professional insurance Q&A

Some things are best left to the experts. Building a house for example. Or country dancing.

Of course, buying professional insurance isn't as convoluted as country dancing (what is?). But it does have its fair share of twists and turns.

If you're trying it for the first time (business insurance that is), it's likely you'll have a few questions before you start.

Nothing too unusual about that. So we thought we'd help by answering some of the more common professional insurance posers we're asked.

Why is it important to have professional insurance for my business?

Why is it important to have insurance for anything? It's usually because you value it, or it's an asset you don't want to lose.

Your business is no different. The service you provide, the things you use to do it, and the people you do it with are all valuable in their own way. So you'll want to make sure they’re protected.

Having that protection means you're free to go about the business of going about your business. And that’s what’s really important.

I need some professional insurance. Where do I start?

To protect your business and its people you could start with professional indemnity insurance, public liability insurance, and employers’ liability insurance.

They're the three pillars of professional insurance and will give you a solid foundation to work from.

What’s professional indemnity insurance?

It’s for businesses that give advice or provide a professional service. It covers claims of professional negligence made against you by clients or third parties.

This might be for incorrect advice, the failure of a recommended service or just a simple mistake that's going to cost money to fix. It's worth noting you don’t actually have to have done something wrong to call on your policy – just an allegation is enough.

Either way, it covers damages or compensation you’re liable for. And the cost of defending you in court if needs be.

What’s public liability insurance?

A bit more straightforward than professional indemnity, public liability insurance covers claims of physical damage to third-party people and property made against your business.

It covers things like trips, slips, spills, and breakages. Say a visitor to your office trips on a loose carpet, injures themselves, and sues you for damages.

What’s employers’ liability insurance?

Apart from vehicle insurance, this is the only policy required by law.

If you have staff (even if there's just the one, they're unpaid, temporary or they’re on work experience), you must have employers’ liability insurance. It covers claims against your business by its employees if they get sick or injured as a result of working for you.

You can read more about your obligations here.

I want to cover my stuff too. What’s best for that?

If you’ve invested good money in your workspace and what’s in it, it makes sense to cover it from the risks of fire, theft, flood, and accidental damage.

To make sure everything's properly covered, a good office property insurance policy should split things into three:

• Contents (desks, furniture, plants etc)
• Fixed IT equipment (PCs, servers, printers etc)
• Things you take out and about with you (laptops, mobiles, tablets etc).

Buildings insurance is for your bricks and mortar and is usually done separately.

Business interruption insurance goes hand in hand with office insurance. It covers the costs of temporarily setting up elsewhere if you can’t work from your usual premises (following a flood or fire for example). It'll also cover the lost income from not being able to trade during the same period.

Anything else? 

Deciding what not to cover can be as difficult as deciding what you should. There’s an argument to say that all professional insurance covers a risk, and you should do what you can to protect what you have. But your budget usually means you have to draw the line somewhere.

If you want to go the whole hog, next on the list might be cyber insurance. If you run any aspect of your business online (which most of us do), it’ll help protect you from the financial and reputational damage caused by a cyber-attack or digital meltdown.  

There’s also directors’ and officers’ insurance if someone in charge is accused of failing their duty as a director.

Legal expenses insurance is a good thing to add on to your policy if you enter into contracts. With employees, clients, suppliers, or contractors. It pays to defend you in a contractual dispute and has other benefits too, like covering lost income if you’re called up for jury duty.

Where do I go for all this?

There’s plenty of information out there and getting quotes is pretty straightforward.

But understanding business insurance can take time and effort. Policy documents are often jargon-heavy and deciphering what’s relevant isn’t for the faint-hearted.

When it comes to protecting your business, you need to get it right. We’d recommend going to a broker – a specialist one ideally. Getting advice and recommendations from those in the know is always better than guessing.

If you have any questions about professional insurance you'd like answered, give us a call on 0345 222 5391.

Image used under license from Shutterstock.