Professional Indemnity and Public Liability are the two essential types of insurance protection from liability for damage, injury or financial loss to third parties or property.
Professional Indemnity
Professional indemnity insurance covers the risk of making a professional mistake: an act, error, omission or through conduct or being misinterpreted.
Businesses that provide opinions, advice, design or specification run the risk of claims against them if the advice or design turns out to be incorrect or incomplete. This can happen to even the most diligent and capable of professionals so it’s important you get yourself covered for this.
Even if you’re not at fault, you might have to spend significant amounts of money on legal fees to prove that the liability isn’t yours.
If a customer’s complaint relates to a potential mistake you’ve made on the job, then there are grounds for legal action against you – professional liability insurance seeks to protect both your assets and your reputation.
This form of insurance covers both the cost of a claim for compensation the business is legally liable to pay (eg. a settlement negotiated out of court or damages and expenses awarded in court) and also the costs of defending a claim.
Public Liability
Business liability insurance covers you for legal costs and certain fines if you accidentally injure or damage other people or their property in the day-to-day operation of your business.
Liability insurance covers two key financial risks – one is the legal cost of defending a claim, and the second is the compensation that you might have to pay the injured or wronged party, plus their legal costs, if a claim against you is upheld.
Though commercial insurance is optional in most cases, it is strongly recommended for businesses in all industries, as the likelihood of being sued for negligence is unpredictable and potentially very costly.
Business interruption insurance
Also known as business continuity insurance, this type of insurance will cover you for losses if you are unable to continue to operate in the event of a disaster, for example a fire or earthquake. This cover is intended to minimise the financial impact to your business when there is an interruption to your normal operations after a major disaster which resulted in a loss of turnover.
Business interruption insurance policies typically cover you for the revenue you would have earned on the basis of your financial records before the event. It should also cover you for ongoing operational costs such as electricity that still need to be paid even though your business is not currently trading.
Commercial property insurance
This kind of insurance covers you for damage from fire, flooding, earthquakes, etc. on any buildings you own as part of your business. Note that if you work from home, your domestic insurance policy may not cover your property if you’re using it for work.
Asset insurance
This cover protects the physical assets such as Tools of Trade, Stock, Office Contents etc of the business against accidental loss or damage. It is often purchased as part of a broader business insurance solution and includes both Indemnity and replacement covers.
Commercial vehicle insurance
If you use a vehicle for work purposes, it’s important to get it covered with a commercial vehicle insurance policy. This will ensure that you’re covered in the event of an accident or theft and usually comes with important benefits such as a temporary replacement vehicle and roadside service.
If you want to make sure you’ve got the right insurance in place for your role, get in touch with us and we’ll get you covered!
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