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Insurance
forms a guarantee against any loss. You must weigh up the extent
your business assets are exposed to risk and what events this
may have on your business in the likelihood of this happening.
Insurance is an overhead, producing no benefit until a calamity
occurs. It is therefore a commercial decision as to how much to
carry, and it is a temptation to minimise this cover. Some cover
is required either by employment law or as an obligation imposed
by a mortgager.
You
will have to establish your needs by discussing your plans with
an insurance broker. Make sure you know exactly what insurance
you are buying. Get at least three quotations prior to commencing
with just any broker.
Employers
Liability
It
is recommended that you carry at least 2million pounds in cover
to meet your legal liabilities for death or bodily injury incurred
by any employee during the course of business. In practice,
this cover is usually unlimited, with the premiums directly
related to your wage bill.
Personal
Accident
Employee's liability only covers accidents in which the employer
is held legally responsible. You may feel moral responsibility
to extend the cover for those carrying out any hazardous task
or to cover your own financial security should you be ill.
Public
Liability
This protects employers against legal liability in the event
of death or injury to a third party on their property. This
may occur as a result of defect in the premises, employees neglect
or liabilities arising from the product you manufacture.
Professional
Liability
This related to anyone giving professional advice and there liability
arising from wrongful advice and negligence. Solicitors, accountants
and management and computer consultants come under this category.
Business
premises, plant and machinery
There are a number of ways of covering these. Reinstatement
provides for the full replacement cost. Indemnity meets only
the current market value less depreciation. There are other
things to consider too. Removal of debris, architect's fees,
employee's effects and local authorities sometime insist that
any new building must meet much higher standards than the ones
they replace.
Stock
Raw
material to finish product, it is as exposed as any other part
of your plant or equipment in the event of a fire or other hazard.
Theft accounted for 50 million pounds in 1982.
Consequential
Loss
During the rebuild of you new premises in the event of a fire,
employees wages and overheads will need to continue during this
interruption. Insurance for consequential loss is intended to
restore your business's financial position to where it may have
been if the interruption had not occurred.
Goods
in transit
Until
the goods reach your customer, they are still at your risk and
you may need to cover them against loss or damage in transit.
Commercial
Vehicle Policy
Although you may have adequate private use cover for your present
vehicle, this is unlikely to be sufficient to cover the vehicles
for business use.
Fidelity
Guarantee and Other Thefts
In the
event of threats from a third party, a fidelity guarantee can
be taken out to protect you from fraud or dishonesty on the part
of key employees.
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