The hidden perks of business breakdown cover for IPSE members
If you’re an IPSE member and you arrange vehicle breakdown cover, you may not realise that your membership could drastically cut your cover costs.
- 23 Apr 2024
Why does my small business need insurance?
- 31 Mar 2022
Like with any business, regardless of whether it’s large, medium or small, you are vulnerable to a number of risks. For example, a client making a claim against you, HMRC investigating your taxes or a flood damaging your premises. If you’re a small business experiencing one of these situations, the cost of putting it right can damage your business and leave you unable to function financially.
For some small businesses, having business insurance is contractually required to work with a client. For those businesses with any employees, even if only on a part time or temporary basis, employers’ liability insurance is a legal requirement.
Aside from any contractual or legal requirements, there are many more benefits to business insurance.
In this article, Markel Direct explain these benefits and why holding business insurance is important for small businesses.
1. It protects your finances
Firstly, and maybe most obvious, is the financial protection a small business can gain from having insurance.
With a comprehensive business insurance policy, you are reassured that whatever claim is brought against you, your business insurance will respond and help you cover any costs resulting from it.
If you’re a limited company, this prevents you having to cover legal fees and potential compensation payments out of your own company accounts. If you’re a sole trader, your liability is not limited, so if a claim is made against you and you are not covered with business insurance, you’ll have to cover the costs with your own money.
A claim can often cost thousands of pounds or even hundreds of thousands, depending on the type of claim. This is why it pays to be protected with the right business insurance.
2. It protects you against cyber attacks
More and more businesses are now storing their data online, including confidential client and employee information. While it’s a much more convenient way of storing and updating data, it does unfortunately increase your risk of experiencing a cyber-attack. According to a recent survey, 51% of SMEs have been the victim of a cyber security breach with the most frequent attack being a malware/ virus breach.
Of those who participated in the survey, 53% of SMEs and self-employed workers said the attacks had impacted them financially, with 68% revealing that the cost of the breach was up to £5,000.
A cybercrime can be devastating for a small business, both for your finances and reputation. As well as this, if you are the victim of an attack, it can stop you from being able to get on with your work as usual, if your device needs repairing, or it results in you losing files that include weeks of work.
While having security measures in place, such as firewalls and anti-virus protection to help reduce the risk of a cyber attack occurring is beneficial, there is still a chance of experiencing a data breach. This is why being protected with cyber insurance, in addition to taking cyber security measures, is important.
If you experience a cyber-attack on your computer systems and data, cyber insurance will cover the financial costs involved in handling and recovering from a cyber-attack or hacking threat. This includes covering restoration of computer systems, loss of income, legal defence costs and more.
Cyber insurance can also include access to a cyber response helpline, allowing you to get free advice from information security experts.
3. It protects your employees
Employers’ liability insurance is a legal requirement under The Employers' Liability (Compulsory Insurance) Act 1969 for all businesses that employ staff. If one of your employees suffers an injury or illness during their work and brings a claim against your business, the insurance will protect both you and your employee. The minimum level of cover legally required is £5 million.
4. It protects your customers
As well as protecting you and any employees you might have, business insurance can also protect your customers.
This is usually through insurance policies like public liability insurance which will payout if a client is injured during your business activities or while at your premises, for example if one of your customers trips and falls over while at your office, injuring themselves in the process.
If they make a claim against you for damages, your public liability insurance policy would quickly respond to cover you and payout any compensation owed to the client.
5. It shows credibility
Although the only business insurance required by law is employers’ liability, carrying other business insurance policies like professional indemnity insurance and public liability insurance will help add credibility to your business and demonstrate that you are a responsible professional.
You’ll also find that many companies who obtain the services of other businesses will insist on their contractors being comprehensively insured. This can mean that without adequate insurance in place, you could run the risk of being overlooked for profitable business contracts.
One of the most popular business insurance products we see among self-employed professionals is Professional Indemnity (PI) insurance, as for many professionals a big part of their job involves providing advice and producing work for other businesses.
Many clients insist that contractors and freelancers pitching for work need to carry PI cover in case something goes wrong, no matter how small. Given this, some might say that carrying PI insurance helps you win contracts.
Whether you are a freelancer, contractor, or a small business owner, Markel Direct can provide you with comprehensive business insurance policies that you will find invaluable.
IPSE members can enjoy a 10% discount* on contractor insurance from Markel Direct, including professional indemnity, public liability, employers’ liability and more.
* IPSE 10% member discount terms and conditions
The discount will be applied to the net policy premium before insurance premium tax is applied. All quotations provided will be subject to meeting underwriting and claims criteria acceptance. All cover will be subject to full policy terms and conditions which are available upon request.
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