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Business Insurance

When running a business you must take out proper insurance to minimise your risk.

Which and how many insurances you need varies from one business to another. Each type of insurance may have different names at different insurance companies. Insurance can be divided into three categories

Business insurance can be divided into three categories

1. Insurance prescribed by national law
2. Insurance for the owner
3. IInsurance which minimises the company´s risk

Thus, you must investigate the coverage of each individual insurance. This is often hard work.

1) Insurance prescribed by national law

Insurance prescribed by national law differs from country to country. But usually it is compulsory to take out insurance for ones staff. The insurance should cover injury at work, health problems, death and other personal problems which affect the employee and his or her family.

2) Insurance for the owner

If you start a personally owned company you as a person are seldom covered by the insurance for the company. You are the owner and not an employee. Therefore you have an insurance which covers any injuries inflicted on you while working in your own company.

3) Insurance which minimises the company´s risk

The insurance companies can deliver whatever insurance you can think of. It is just a matter of the price for the insurance policy. Therefore you have to consider what kind of risk you can accept. This is called risk management.

The most normal insurances to take are:

• Professional indemnity insurance - covers damages you may cause as an effect of your business
• Insurance against loss - by fire, theft and water damage
• Consequential loss - insurance covers the profit loss resulting from long term business interruption
• Project insurance - dedicated to one individual large-scale construction project
• Transport insurance-- companies with large freight needs should take out proper insurance

You could contact insurance consultancies specialised in business consulting that can help you find the best possible coverage at the lowest cost. Some consultancies are definitely serious, but, like within other trades, here you also risk running into some who are not.

Another solution is to ask your accountant. Only a few accountants are insurance experts, however most are fairly experienced in the field.