Written By Catherine France
Whether you are an experienced social media manager or just starting out, it would be a devastating blow if something goes wrong and a client tries to sue you. Without business insurance, you could be liable to cover the costs from your own pocket, a hit most people’s cash flow cannot afford or recover from.
What are the risks?
Every day there are millions of posts published on the internet, adverts are created, blogs are posted and as soon as your post is in the public domain it is open to potential criticism.
You are responsible for the content you publish and that includes the facts, quotes, claims and images you use, for your business and your clients.
Here are some examples of what might annoy people enough to make a claim against you:
- Defamation – Saying something which could damage an individual’s or company’s reputation could open you up to legal action from the party in question.
- Infringement of intellectual property rights – If you include content from another article or post a photo or logo you do not have permission to use. Copyright law is complicated, and it is easy to make a genuine mistake when using an image.
- Confidential information – This could be publishing performance figures or announcing new service without first squaring it with their client. This could be intentional or accidental.
- Data theft – one morning you switch on your computer and there was no response except for a ransom demand. Your client’s data is gone, and you have to deliver the bad news.
What types of insurance could help protect you?
Operating your own business can be a great way to realize your entrepreneurial dreams, but you absolutely need business insurance. If you don’t have the right insurance, you could be putting your assets at risk.
While lots of us are running our businesses from home, it is unlikely that home insurance will provide all the cover you need to protect your business from fire, flood, interruption, data theft or liability claims, in which case you need a specific policy to cover these things.
Professional Indemnity Insurance is also known as errors and omissions, provides protection if a client feels that the advice you have given them is incorrect or falls short of the mark and as a result of that advice your client has lost money.
For example, if you provide marketing advice to a client that the client later determines had a negative financial impact on them personally or professionally, they may choose to sue you.
A professional indemnity policy will typically cover you in the following ways;
- Take care of any legal representation you need.
- Cover the cost of any damages should you lose your case.
- Cover the costs of putting right any mistakes you’ve made.
- Protect you if you lose a client’s documents while they’re in your possession.
You need this type of cover if you;
- Give advice
- Provide designs
- Want protection against allegations of mistakes
- Have an industry regulator that requires it
Public Liability can protect against compensation claims for injury or damage to customers, suppliers or third parties.
Even in lockdown you could still need public liability insurance in case someone visiting your home injures themselves, it doesn’t even need to be one of your customers. Some insurance claims involve delivery people, for example, if the van driver bringing your boxes of marketing flyers trips over the telephone wire in your front hallway and fractures his wrist, preventing him from working for weeks, then you have a potential claim on your hands.
Cyber Insurance if you use a computer to run your business then you probably need cyber insurance. The increase in the number of incidents where people use a computer to commit a criminal offence is on the rise and a cyber insurance policy can help, whether you suffer a data breach, a hacker holds you to ransom or you send the wrong set of data to a client a cyber insurance policy can provide cover against damage to your computer systems, removing viruses and loss of income in addition to which insurers can also include access to professional cybersecurity consultants and PR experts to help minimise the reputational damage a loss of data could cause your business.
Employers Liability cover protects your employees if they are injured as a result of an accident while working for you. A minimum limit £5 million is a legal requirement for most businesses, although there are certain exemptions – if you are self-employed or if you only employ close family (and are not incorporated as a limited company).
Business Buildings Insurance is a must whether you work from home or your business premises make sure that you are insured against damage to the structure and that you insure the structure for the rebuild cost and not the market value.
Computers & Electronic Equipment, computer equipment and software are vital to almost every business, but they are vulnerable and can seriously threaten the financial livelihood of a business. Computer equipment is susceptible to many exposures (such as breakdown and virus) so it is important to insure your computer and electronic equipment.
Tip: Make sure that portable computer equipment is also insured in the UK or Worldwide and is covered for accidental damage should an accident happen.
Business Contents Insurance can protect the possessions and equipment in your work premises. A typical business contents insurance policy will cover damage or loss to furniture, tools, computers and equipment as a result of a fire, flood or theft but can also include accidental damage or malicious damage. You will need to add up the total cost of replacing all your contents to establish the sum insured you need.
Portable Tools if these are not already included under the business contents section of a business insurance package policy then make sure you can add them on when they are at your business address and when out and about.
Stock can usually be added to most business insurance policies and will provide replacement costs for stock held at your premises or in storage. High-value stock may be specifically insured, for example, digital devices, precious metals or luxury goods.
Business Interruption is there to help you get back up and running if there is an event, such as fire or flood, which stops or interrupts your trading, and this type of insurance can cover the consequential loss of revenue. It can also provide alternative premises, so you can keep trading, cover if the main supplier suffers a loss and your business suffers or cover if a laptop/tablet is stolen preventing you from trading but check with each individual insurer for full terms and conditions.
How to get more information
If you need more information about insurance for your business you can download the FREE guide 10 Types of Insurance Every Small Business Needs.
About Catherine France
Catherine helps small businesses understand the insurance they need and why they need it in a friendly, no-nonsense way to remove the fear and give them the information, knowledge and confidence to talk to an insurer or broker about your insurance, leaving you feeling happier and smarter. She is independent and not tied to or paid by an insurer or broker.
Important Note: The information in this post is general and is designed to be a guide to the subject matter, your needs will be very much individual to your business. This blog post is for information only and is not providing you with advice.