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A Guide to Commercial Insurance Covers

Enterprises come in all shapes and sizes, and the role of the Business Insurance Broker will vary in some respects with the size of the client company and the amount of insurance expertise the client has available among its own staff.

Business Insurance Brokers

The essentials of the broker’s task will be the same, however, for the largest company as it is for the individual: to use his knowledge of insurance and of the insurance market to help his client to arrange a sound insurance programme which, to the maximum extent possible, meets the client’s particular needs.

The Commercial Insurance Broker will handle the insurances of a small company in a manner very similar to those of an individual. The relationship is likely to be a personal one wit the directors of the business, and they can be considered, in a way, as individuals who have a different, and more extended, set of insurance needs because of their involvement with the company.

Large companies will be offered what is known as a commercial combined policy which has many different elements of cover which can be combined to make a bespoke policy for the enterprise.

Employer’s liability cover to protect the workforce must be arranged, and motor insurance is also likely to be a necessity. If the business has plant or machinery which must have a periodical statutory inspection, it will be usual to arrange for this to be done by a specialist engineering insurer under the terms of an engineering inspection contract, with or without insurance.

Then there will be all the other insurances which a business needs – public and products liability, theft and money insurance, goods in transit and perhaps marine insurance, all-risks covers, fidelity guarantee and possibly others.

The individual may be happy to consult a broker for life or motor insurance only, but the industrial company is likely to want a single source of advice for all its insurance problems.

The larger the client company is, the less it will be interested in buying standardised commercial insurance covers or packages designed for small business insurance, and the more it will want policies which match its own specific needs.

When it reaches a large size, a company may be interested in extensive self-insurance, and these days it is part of the broker’s role to help such clients develop appropriate self-insurance plans and to advise on risk management measures to ensure that the risk that is being retained is reduced as far as is economically possible.

The approach to risk management in the United States has until recent times been somewhat dogmatic in that the risk manager has been regarded as the man who manages pure or static risk within the company. In Europe the approach has always been that the risk manager acts in an advisory capacity to line management and coordinates insurance and risk management activity.

An example of a small business insurance package which is commonly sold online is the Tradesman’s insurance package, which includes all elements of cover required by a small business or self employed trader such as basic liability covers and theft of tools.

Commercial Risks
The largest risk that a business faces is from liability to others, and the potential costs and damages a company could face if a claim was made against it.

Business liability insurance is usually sold as a package and will always include Public Liability, often just known as PL, which protects the company against claims from the public whilst on the business premises.

Company directors can also protect themselves against liabilities with Directors and Officers insurance (D&O) cover.

Property Damage
Most business large and small will have premises that need protection against buildings perils such as fire and flood and commercial property insurance is available to cover all buildings insurance risks. Similarly commercial contents insurance for business premises is available which covers office and business equipment including files and data processing against the common perils. For companies that carry stock, this type of business contents insurance can be extended to cover risk such as deterioration and damage.

For the small businessman who works from home these covers are often available with strict limits of indemnity, as a bolt on to a standard home buildings and contents policy. This type of cover is often effective for self employed people with just a computer and a home office.

Additional Commercial Risks
Because commercial insurance is designed to cover all classes of business, there are many various trade or business specific covers available which can be added to a combined policy.
Examples of these covers include loss of licence to trade, book debts, hauliers cover, engineering insurance and plant inspection services.

Outside of most combined policies are additional risks more often sold under separate policy covers, that should be considered to protect your business against all eventualities.

Examples of these are, Commercial Legal Expenses insurance cover which protects the company against claims made by employees for unfair dismissal and allows you to bring cases against suppliers.

Business Insurance Cover

Insurance Brokers will not only be able to assess the complete range of risks that your business is exposed to, and provide the correct levels of cover, they will more often than not have a unique local knowledge of the risks involved and will be able to negotiate premiums that reflect the nature of the risks.

Furthermore, in the event of a claim, and as most businesses will be faced with claims at some point in their trading life-cycle, the broker will handle all the settlement negotiations with the insuring company and allow you to continue what you do best – running your business.

Commercial insurance and tradesman risks covers for tradesmans insurance are widely available online today.

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