Your Business Insurance Questions Answered

Joe Howard, Associate Director at Hugh J Boswell

Am I legally required to have employers’ liability insurance?

Yes, if your business has one or more employees. Even if they only have part-time or temporary workers, businesses are legally required to have Employers’ Liability Insurance to protect employees in the event of a work-related injury/illness. The only exception may be if your employees are immediate family members. However, it is best to check with your insurer as businesses could be fined thousands for each day that they are found to be inadequately insured.

Do I need to insure all of my business equipment?

Some business owners make the mistake of underinsuring their equipment, but it is in your best interest to make sure the total value of your contents is covered. If you’re underinsured and need to make a claim, it’s very unlikely that you’ll receive the full amount of compensation you want.

If you insure your equipment for only 50% of its actual total value, insurers may apply a condition called ‘the average’. This means that regardless of how much you want to claim, the insurer will only pay out a maximum of 50% of this sum, leaving you out of pocket.

Is business interruption cover necessary for my business?

One of the more common mistakes business owners make is underestimating how long their business would take to recover after an unexpected event, such as a fire or flood. Business owners should be realistic about how much their business would be affected should something happen, and discuss with their insurer how much interruption cover to purchase, if any.

Although other business insurance policies can cover the cost of equipment and other losses, they often don’t cover the loss of income you suffer whilst your business isn’t trading. Business interruption cover will compensate you for this, and can help you to get your business back on track.

What is cyber insurance, is it a myth that my business needs it?

Cyber insurance protects your business from internet and IT-related breaches and incidents. It isn’t considered a priority by many business owners, as they believe their IT system provider or their broader business insurance policy will give them sufficient protection. However, this cover may not be enough for some businesses, especially those that mainly trade online or store sensitive data on their computer system.

For these businesses, cyber insurance would act as an additional safety net and help them to deal with matters resulting from a breach or other event.

To understand more on insurance ‘myths’ you can read Joe’s recent interview with comparison site Know Your Money. In this article Joe fully debunked the common myths his customers believed about business insurance, clearing up many of the misconceptions they held around cyber insurance and other myths!

Do I have to report every incident to my insurer?

It can be tempting for business owners to not report every injury or incident that occurs, especially if it doesn’t seem serious at the time. However, this could put you at a disadvantage should the employee/customer then decide to take the matter further.

If the incident isn’t immediately reported, insurers may refuse to deal with any claims you make for it later. Informing your insurer at the time of an incident means they can offer you advice and make an initial investigation in anticipation of a claim being made.

Who is legally responsible for work experience students: the company or their school/college?

During their placement, work experience students are the full responsibility of the company. With respect to insurance, the students are considered employees while they are working with the business, and should be covered under your Employers’ Liability Insurance. If you have any doubts, check your policy documents or contact your insurer.

The above information was supplied by Joe Howard who is an Associate Director at Hugh J Boswell. He joined the firm in 2007 and over the years has helped many businesses get the right level of insurance, currently handling the accounts of over 200 clients.

Joe has used his extensive experience to help many business owners understand and answer complex insurance questions.


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