The Public Liability Insurance Blog

4 recent events that demonstrate the need for business insurance

One of the biggest questions that gets thrown our way either from clients, lost members of the public wandering into our office or other publications looking for articles on the subject of insurance is “do I really need business insurance?”

We of course always answer this with a “yes”, normally with some sort of qualifier and really, we’d probably all be out of a job if we didn’t, but there are real world events and trends that you can look at that will answer this question for you. Here are some recent high-profile events that should make you sit up and take notice when it comes to business insurance.

1. Hurricane Sandy

Hurricane SandyIn October of last year, 24 states in the US were struck by a devastating hurricane that managed to clock up approximately $75bn in damage and racked up a death toll of at least 285.

It might feel that we’re taking a tragic event and trying to sell insurance off the back of it, but that is not our intention. Hurricane Sandy is just a recent example that joins a long list of other examples of just how brutal nature can be. If you know you live in an area where this sort of storm damage and natural destruction can take place, then you need to make provisions and prepare for that day in some way. Even much smaller storms and less dramatic hostile weather conditions can carve a path of destruction through your business and so it pays to be prepared.

2. The winter floods

FloodsThe rain just kept on coming this winter. Lots of houses regularly flood each year (this is what happens when you build on the flood plain after all) but this year saw particularly persistent floods hit several places around the country.

Floods can interrupt your business and can cause extensive damage to your premises, with both scenarios coverable by parts of a business insurance policy. This is a force of nature that you have no control over no matter how much you stand in ankle deep water shouting at it to get out of your building.

3. Horsemeat

HorsemeatThe horsemeat scandal is fascinating for the fact that it just seems to keep on going. It does raise a very interesting question that all businesses should be asking themselves right now: Do you know what you are selling?

It’s easy to get a lot of distance between you and your products. In the case of the horsemeat saga it seems to be because there are so many extra links in the supply chain, leading to diminished accountability and increased corporate apathy. With a smaller business, you’re unlikely to have exactly this same problem, but there’s still the possibility of being caught out by a product you are selling.

Product liability insurance can help you out here. If you are merely selling a product and not manufacturing it directly, this cover will be relatively inexpensive and very necessary as you can still be held liable for it. If you are manufacturing the product itself, you are looking at a much more comprehensive policy that would be crazy to ignore considering the huge ramifications of product recalls or issues being discovered in your manufacturing process.

4. The Queen being taken ill

Queen Elizabeth III know what you’re going to say. Queen Elizabeth II is not a CEO or small business owner, or at least, if she is then she is keeping that particular secret life especially well hidden, but the Queen being taken ill should make you sit up and take notice. What are your contingency plans for key members of your staff, or even yourself, being out of action due to an unforeseen illness or injury? Can your business survive without someone at the top turning the crank?

This might be a simple case of ensuring you have contingency plans and aren’t overly reliant on any one person, but it also demonstrates that the unexpected can happen. Something like key man insurance cover might however bail you out. Most of us by this point probably assume that the Queen is an immortal and indestructible super being that is infallible when it comes to matters of health and have assumed this for quite some time and you probably have the same attitudes towards your more dependable senior staff members, or more likely towards your own workaholic self.

It’ll never happen to me

Hopefully, you’ll never need to claim on your insurance, but you will see things affecting businesses make the news all the time. Next time you see a business in trouble, think about how a similar circumstance could affect you and try to work out if you’d be prepared for it.

We could sit here and tell you that you need business insurance all day and some days we will do just that, but until you start thinking about why that might be the case for yourself, you could be leaving yourself open to a disaster that would be incredibly difficult to recover from.

Written by Richard King for YOUR Insurance, a broker specialising in business insurance.