Why do I need insurance?

This section takes you through why you need insurance to protect your business. As an employer, you are legally required to have Employers’ Liability Insurance. If you use motor vehicles for your business, you are legally required to have Third Party Motor Insurance.

But buying other types of insurance can be much more than a sensible precaution – they can make your business stronger, safer and more effi cient. Insurers help you to identify the wide range of risks you face every day. They help you to put systems in place to control those risks and prevent them from turning into serious setbacks. When problems do arise, insurers provide fi nancial help to continue doing business, and get you back on track through replacement, repair or reinstatement.

Forward:

Running a business is risky. That is one of the reasons we both admire the millions of people who launch, lead and work for small businesses up and down the country. They often invest their own money as well as their time, talent and energy. Between them, they create vital jobs, provide essential services and generate signifi cant wealth for the country.

The insurance industry exists in order to help these companies manage their risks and claims for losses when things unfortunately go wrong. So we are delighted to support this very helpful guide to the different types of insurance that are available.

Insurance is an essential safety net. The fl oods of 2007, for instance, hit many businesses hard, not just through physical damage but also through the interruption to trading that followed. Insurance helped to put these businesses back on their feet and pay the cost of the damage.

Every day we also learn about fi res or other incidents that can rip the heart out of a business. And, of course, businesses have fi nancial obligations to compensate their employees and customers that can often only be met through their insurance policies.

The insurance industry is providing more advice for employers to assess and deal with the risks that they face. After all, good risk management leads to lower rates of claims. And that, in turn, should lead to lower costs and premiums.

Some of these insurances are compulsory and others should be considered on their merits. Again, this guide provides a valuable starting point when considering which types of insurance would be right for you. Businesses will of course want to make their own judgement about the advice in this guide.

The Government and the insurance industry want to work together to ensure that Britain’s small businesses fl ourish. This booklet is an important step towards that goal.

Pat McFadden
Minister of State, Department for Business, Enterprise and Regulatory Reform
Stephen Haddrill
Director General, Association of British Insurers

Download Insurance for Small Businesses: a guide to protecting your business

PDF format, 471KB, 24Pages.

Contents
Foreword 5
Why do I need insurance? 6
Insurance required by law 6
Other types of insurance 8
A. Protection against compensation 9
claims and legal action
B. Protection for your property 10
C. Protection for your employees 12
D. Protection against financial risk 13
Buying insurance 14
Managing your risks 16
Insurance: working for you 20
Useful contacts

For more information, contact:
Association of British Insurers
51 Gresham Street
London EC2V 7HQ
020 7600 3333
www.abi.org.uk

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