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Why insure?

Get cover to help your business, and stay on the right side of the law

Every business encounters the unexpected occasionally. Sometimes that's a good thing - like a new, big contract from out of the blue. But occasionally it's a bad thing. That's what insurance is there for, and why business managers need to get to grips with it. It doesn't sound interesting, but it might just protect your firm in the event of a crisis.

Insurance can help you comply with legislation and regulation. By having a basic grasp of the legal issues, you can ensure your business meets stipulated requirements - and then that's one less thing to keep you awake at night.

Quote�If you control and eliminate risk where possible, you increase the efficiency of your operation.�End Quote

An essential part of the insurance process is risk management. If you control and eliminate risk where possible, you not only reduce the danger of something happening, but you increase the efficiency of your operation. That's why a risk management strategy should be an integral part of your overall business plan.

You can get more information on risk management from Norwich Union. This includes advice on health and safety requirements.

For many businesses, insurance is something they buy just because they have to. But you should look on it as a tool that makes your business safer, stronger and more effective. It really needs to be an integral part of your overall business planning. If you're spending time and money on insurance anyway then you might as well get the most out of it.

Legal requirements

There are a number of insurance policies you have to buy as a business - the law says so! For example, all employers have to buy employers' liability insurance. This covers you, as an employer, against claims from employees for accidents or sickness they may suffer as a result of working for you.

As an employer, you absolutely must:

Have liability cover of at least �5 million. It sounds like a lot, but if someone is seriously injured while working for you, the cost implications can be enormous. These days, most policies provide �10 million cover.

Display your Certificate of Employers' Liability Insurance at each place of business, and keep it after it has expired (technically, for 40 years). It doesn't matter that none of your staff have ever read it; it still has to be there.

Cover all employees, including contract staff and casual workers. Don't go cutting any corners here.

If your company uses motor vehicles then you must buy at least third-party insurance that covers everyone who will be driving them. For peace of mind - and to ensure you don't lose out if an employee writes off your new van - fully comprehensive cover is a good idea.

Your company's liability for any damage caused by an employee's private car while on business will usually be covered if you have public liability insurance. However, if any of your employees do use their own cars for business, you should still check they are covered for this under their private policies.

Finally, if you run more than one vehicle, the law requires you to achieve what are called Duty of Care obligations. This includes developing and running a risk management strategy to cover your vehicles and drivers. You can get full information on this here.

What next?

Most business insurance policies cover the common threats. Ask yourself these questions to help make sure you have sufficient cover.

Find out how to cut the cost of insurance by buying it effectively.

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Finding a broker

One way of buying insurance is to purchase through a broker. If you haven't already found a broker to help with your business requirements, you can find a general broker in your local telephone directory.

However, please feel free to call 0115 948 7019 to discuss your needs with The Business Risk Solutions division of Lockton Companies, a specialist small business insurance broker who can give relevant advice as well as providing you with the cover you need. You can also email your enquiries to brs@uk.lockton.com.

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