Rules & Regulations

Business Insurances

Business insurances

There are four types of insurance you may need or may wish to have for your business:

• Insurances required by law
• Insurances that cover your legal liabilities
• Insurance against loss of property or trade
• Personal insurance

You can also get 'specialist' tourism insurances, which effectively are bundles of insurance wrapped up into one policy, with one premium and are certainly worth investigating - see below.

Business Link provide a simple, useful question-and-answer tool for working out which insurances your business needs: Business Link Insurance Tool

Insurances required by law

All businesses that employ even one member of staff are required by law to have Employers Liability Compulsory Insurances (ELCI) which covers you for claims against you by employees who have suffered death, personal injury or damage in the course of their employment by you. The Health and Safety Executive (HSE) provide a clear, comprehensible guide for employers: The Employers Guide to ELCI. Be aware that changes to the NHS Injury Cost Recovery Scheme came into force on January 2007, making it possible for the NHS to recover costs for treatment and ambulance services from whoever was liable where a personal injury compensation has been paid. This therefore includes employers if they are successfully claimed against by an employee and treatment was given by the NHS. Check your policy covers this and read more about the ICR scheme here.

Motor insurance is compulsory (third party cover as a minimum) if you use vehicles for your work.

Professional Indemnity Insurance is required by law for some professions, such as solicitors or accountants, and is not compulsory, but highly advisable, for other businesses that provide advice, consultancy and services, or that sell their knowledge and skills. Take care when arranging and maintaining cover - claims could be made against you for several years afterwards.

Insurances that cover your legal liabilities

Product Liability Insurance is not compulsory but advisable if you make or supply products, because, under the Consumer Protection Act 1987, you are liable for the safety of any products you make or import, and damages can be sought from you in the event of death, injury, illness or damage to property caused by your products. Click here for more on Product Liability.

Public Liability Insurance is not compulsory but highly advisable if you have members of the public to your premises (even if you work from home) or if you need to be covered for damage by you at premises other than your own. Click here for more on Public Liability.

Insurances against loss of property or trade

There are a number of different types of insurance that protect against loss or damage to your property or your trade. Below is a list of the most common ones, each link goes to the Association of British Insurers website for more information.

• Property - buildings and contents
• Engineering failure
• Theft
• Money
• Goods in transit
• Business interruption
• Trade credit insurance
• Motor vehicles
• Legal expenses
• And a variety of other risks

Personal insurance

You'll also need to consider insurances that cover you personally: life insurance, income protection, health insurance, pensions and so on. Below is a list of the most common ones, each link goes to the Association of British Insurers website for more information.

• Personal accident and sickness insurance
• Income protection insurance
• Private medical insurance
• Life insurance
• Pensions

'Specialist' tourism policies

Some brokers provide policies specifically for different types of tourism businesses, that effectively are bundles of insurance wrapped up into a single policy with a single premium. It is worth asking your local brokers what they offer and searching on the internet for insurance plus your type of business: eg 'activity centre insurance'. As an example, this is the summary of cover from a genuine Guesthouse/B&B policy:

This option is worth checking because it may offer a reduced overall cost, rather than purchasing separate policies, but you will have to do your homework and check that:

• The broker is registered with the British Insurance Brokers' Association or the Institute of Insurance Brokers (IIB)
• The policy you are being offered really meets your needs and has the right level of cover
• The policy premium is competitive - get a number of quotes. It is time consuming but worth it. Don't forget to ask for their best price and if they aren't beating your previous quotes tell them. They may reduce your price of they may be offering something additional which you haven't realised.
• The insurer(s) is/are a member of the Association of British Insurers

Reducing premiums

There are a number of steps that you can take to reduce your premiums for some insurances. They include:

• Have a good health and safety record and a good health, safety and environmental management system
• Improve security, including locks, windows, lights, cameras and so on
• Avoid making small claims - these can push your premiums up for future years
• Agree to make a voluntary excess payment

A good insurance advisor will give you information and guidance about reducing your premiums.

Getting insurance

To obtain insurance talk to your insurance broker, use the Toolkit to see which North East insurers offer good terms to tourism businesses, search on the internet or use Business Link's choosing an insurance adviser pages.