North Belfast Partnership - Social Economy Training
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Course Introduction
Module 1 - What is a Social Economy?
Module 2 - The Idea
Module 3 - The Organisation
Module 4 - The Legalities
Module 5 - Finance
Module 6 - Sales and Marketing
Module 7 - Social Audit
Module 8 - Premises
Module 9 - Equipment
Module 10 - Staff
Module 11 - Business Plan

Accessibility Information

EU funded

4. Insurance

There are various types of insurance that you may require, depending on the nature of the business. If an accident occurs or one of your employees becomes ill working for you, you need to be insured against any claims that may arise. This section outlines some of the most common types of insurance required by law.

Employer’s Liability Insurance

You must insure your business against any potential claims arising from employee illness, accident or injury. This is a legal requirement. The statutory minimum cover is currently £5 million and you are required to display this certificate in the workplace, most policies however automatically provide £10m cover. It is good practice to keep your old certificates for 40 years after they have expired since employees may lodge a claim many years after leaving your employment or contracting an illness!

Motor Vehicle Liability Insurance is required on all vehicles used on the road by your business. Third party cover is required as a minimum.

Depending on the location and type of business, you may require other insurances for sound business reasons, even though they are not a legal requirement.

The level of cover you take is also crucially important and should depend on your assessment of two factors, firstly what is the realistic risk or likelihood of the event occurring and secondly, how damaging could that event be to your business. For example, a business is at low risk of fire due to high levels of compliance etc however a single outbreak of fire could completely destroy the premises and stock and force them to close; whether they are able to reopen or not will depend upon the level and types of insurance in place. Therefore low risk events are sometimes better insured than other events that are more likely to occur e.g. loss of key employees, simply because their potential effect is so much more potentially damaging to the business.

It should also be remembered that insurance companies are entitled to reduce any claim by the percentage of underinsurance! Often too people forget that when they purchase an item on credit terms, they must still repay the debt even if they lose the goods during a disaster – underinsurance can be disastrous in itself!

 

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