For businesses of all shapes and sizes, a comprehensive insurance package is an integral tool for protecting the most vulnerable areas of the company and ensuring safety in the future. Most business owners recognise this, and put a great deal of effort into securing protection against relevant threats. However, even those with the most comprehensive cover can sometimes accidentally leave weak spots in their insurance, and leave their businesses vulnerable.
The following list explores some of the more frequently encountered insurance caveats and areas that can be left unintentionally exposed.
#1. Intellectual property insurance
When you think of business insurance, what usually springs to mind is protection against injury for people, or protection for the physical property of your company: the building, contents, equipment, machinery, etc. What is often overlooked, is protection of intellectual property. Intellectual property could include ideas and designs, which could be relevant for those in an occupation such as an architect for example, or it could simply be a business trademark that needs protecting.
Consider just your business’s trademark or logo – although immaterial to an extent, it is arguably your company’s most valuable asset, as it’s at the heart of your business brand and identity. If someone were to copy or steal this and use it, in part of whole, as their own business’s trademark, it could bring a number of problems. However, if you protect this property with the relevant insurance, you need never worry that that situation could arise.
#2. Accidental damage cover
This is particularly relevant to property landlords, with both commercial and residential tenants. Accidental damage cover provides protection in the situation that unpreventable damage is caused, on a one-off basis, to your property or its contents. However, accidental damage is considered a specialised risk that is sometimes not included as standard in landlord insurance packages.
Even if damage is insured against in your buildings or contents insurance policies, you may still have to take out an extension on these policies to protect against accidental damage specifically – a caveat that many are unaware of. Even if your tenant is the one who caused the damage, you, as the landlord, could still be responsible for paying.
Imagine the following situation: if a residential tenant was to accidentally spill red wine and stain the carpet in the living room, you could take money from their deposit for repairs (depending on your rental agreement of course). But, what if that carpet extended throughout the hallway and dining room and cost twice as much as the tenant’s deposit to replace – where would you find the extra money? Provided the insurance supplier deems this situation to indeed be a case of accidental damage, a successful claim could see the cost of the carpet replacement covered.
#3. Business interruption insurance
Business interruption is not unheard of, as such, but its value is often under-appreciated. Business interruption insurance provides protection in the event that your business has to close, partially or fully, due to unforeseen circumstances. Many people think that business interruption insurance provides the financial reimbursement needed to get your business back up and running at full throttle. But, this is not the full story. Business interruption insurance does not pay for repairs or replacements needed for your business to operate normally, but rather it helps to sustain you during this time.
Take the following as an example: severe weather conditions cause serious damage to your business’s building, and you have to close indefinitely while repair work is carried out. Hopefully, the cost of the repairs will be covered by buildings insurance, and contents insurance will replace any essential items that have been damaged. But, whilst your business is not making any money, you may still have to pay overheads such as utility bills, rent, and wages. This is where business interruption comes in – to help you with the ongoing costs of running a business while no money is coming in.
There are many different types of cover that can be built into any business insurance package, depending on that business’s individual circumstances and needs. It’s always a good idea to thoroughly explore the extent of cover for each policy you are consider, and be aware of caveats such as the above. The last thing you want is to take out cover for a certain area of your business, to then later find out that you may not be as thoroughly protected as you thought.
There is a lot of information available on the internet, or you can always get an insurance broker on the phone and get all the answers you need.
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