Business insurance protects businesses against losses suffered in the course of their normal activities, particularly when the business faces a compensation claim. Covers include professional indemnity insurance, public liability insurance, and employers’ liability insurance.
Business Insurance FAQ's
Have a question about working with Pozitive Insurance and what to expect? You should find the answers here. Search our Frequently Asked Questions below or explore our topic areas.
What is Business Insurance?
What type of insurance does my business need?
Consider the activities your business is involved in and the risks that you might encounter. Could a situation arise in which a customer alleges that your business has been negligent in a professional capacity?
Alternatively, could a member of the public be injured by your business and claim compensation? Do you have buildings, contents, business equipment, or stock to insure?
What is Employers Liability (EL) and what does it cover?
If your business has employees, you are almost definitely required by law, to purchase employers’ liability. EL would cover instances when employees suffer injury, illness or damage as a result of their work. There are a small number of instances, in which your business may not be required to have EL cover. To see if you’re exempt, check the Health and Safety Executive (HSE) guidelines or send us a message, and we can talk you through your options.
What is Public Liability Insurance and what does it cover?
Public liability insurance is vital if your business comes into contact with members of the public, this can include on your own business premises or away from your business premises, in the normal course of business activities.
Public Liability cover will react in the event that your business injures a member of the public or damages their property. Most shops, restaurants, hairdressers, builders, and tradesmen take out this insurance. Check your client contracts to see if a particular level of public liability insurance is required.
What is Product Liability (PL) and what does it cover?
Not to be confused with Public Liability, product liability covers your business in the event that a product you produce injures someone or damages their property.
You may be held liable for damage even if you didn’t manufacture the product.
Do I need Professional Indemnity insurance?
Professional indemnity insurance provides cover for businesses that provide advice or professional services to other businesses. If there are errors in your work, or a client alleges you have been negligent in the service/advice you have provided, your client may sue you.
Professional indemnity insurance can cover the compensation claims and your legal costs. In certain instances, if you are part of professional associations, membership may require you to hold PI insurance.
PI insurance is required by (among others) surveyors, accountants, and architects, law firms, investment firms.
If you would like to discuss your PI requirements in detail, please send us a message and we will make contact and walk through the various options available.
Is Professional Indemnity insurance compulsory?
While it is not compulsory for all professions, if you are a member of certain professional bodies, you may be required to hold adequate PI insurance. Similarly, it may be contractually required by your clients, to hold PI cover, before you engage in work for them.
There are certain professions in which PI cover is compulsory this includes (but is not limited to) solicitors, financial advisers, accountants, and architects.
What is the difference between errors and omissions and professional indemnity insurance?
Confusingly these are 2 different names for the same cover. The terms are used inter changeably within the insurance market.
What is a retroactive date on Professional Indemnity insurance?
The term retroactive date is mentioned in relation to PI policies. It identifies the date from which you have held “uninterrupted” PI cover (i.e there have been no breaks in your cover). Its purpose is to exclude claims arising from any work undertaken prior to date shown.
What property should I insure?
The textbook answer to this question is that you should consider insuring any property in which you have a financial interest/relationship with.
However, this is quite a wide question and will involve some more detailed analysis. Some of the questions we can help you to answer include, if your property was to be completely destroyed, could you afford to replace it? What is your attitude to risk? How likely is it that you will need to use this insurance etc. All of these questions will help us decide your property insurance requirements.
What happens if I am underinsured?
Underinsurance describes the situation in which the cover you have purchased does not meet your requirements because it is not sufficient to meet your business requirements in the event of a claim.
The result is that you may receive a reduced pay-out. Policies often include a clause known as “average”. This clause allows the insurer to reduce its liability for a claim by applying a proportionate settlement, or ‘apply average’. If the average is applied the amount paid to you by the insurer will have the same proportion to the actual loss, as the sum insured has to the full value of the property.
What is business interruption?
Business interruption insurance protects businesses against the financial loss suffered as a result of a material damage/property claim (e.g in the event of a fire or flood etc).
Unlike buildings insurance, which only covers physical damage, business interruption exists to cover the income a business would have received had the incident not happened.
This safety net is often the difference between a business bouncing back from and insured event or going under.
What is an indemnity period?
An indemnity period is a specified amount of time during which an insured can receive benefits from an insurance policy.
It is particularly important when considering business interruption polcies because the is the maximum length of time (specified in months), that the policy will support the business following an insured event causing an interruption to the business.
As you can imagine It is vital that proper consideration is given to the maximum indemnity period when arranging BI cover as the effects of a significant claim at the premises can often be underestimated.
What is Cyber Insurance?
Sometimes referred to as cyber liability insurance, cyber protects your business from the damaging effects of malicious cyber-attacks on your computer systems and data
Unfortunately, these attacks are becoming increasingly frequent, however only the very large incidents make the news. However, attacks on smaller businesses are rising at a troubling rate.
You may be asking why your business would be the subject of a cyber-attack?
The simple answer is that in the 21st century data is the most valuable commodity - the data your business holds will be useful to someone.
If you store sensitive data about your clients or employees on laptops, tablets and other internet connected devices, cyber insurance is generally considered vital cover for your business.
Does cyber insurance cover paying ransoms?
Most cyber policies will cover potential ransom payments; however, this is not universally the case. It is vital to check the wording.
In most cases cyber insurance will cover the cost of ransom payments and system recovery, as well as indirect costs related to business interruption, reputation management and GDPR investigations.
What is Directors and Offers Insurance?
D&O, often referred to as Management Liability Insurance covers the cost of compensation claims made directly against your business’s directors and key managers for alleged wrongful acts.
If these claims are successful a director’s personal assets may be at risk
Companies purchase D&O cover because managers can make mistakes. D&O coverage includes financial protection for managers against the consequences of actual or alleged “wrongful acts”. Policies cover the personal liability of company directors but also the reimbursement of the insured company in case it has paid the claim of a third party on behalf of its managers in order to protect them.