Who needs Professional Business Insurance?

It's taken you years of late-night studying sessions, missing out on parties and holidays and shelling out thousands of Rands (if not hundreds of thousands) to complete your degree. Now that you're ready to swap your graduation robe for something more formal, you might be planning on starting your own business and going it alone. You're in good company, as research shows that despite the turbulent past few years, early last year,  87% of small businesses were optimistic for the year to come.

However, before you start looking for potential office space or hiring staff, you should consider whether you'll need professional business insurance. Here's what you should know about getting professional insurance — and how Budget Insurance can help you select the right coverage for your needs.

What is business insurance and what does it cover?

Most people are familiar with household insurance, where they pay a monthly fee in exchange for having their car or household goods repaired or replaced in the event of damage or accidents.

Business insurance operates a little differently from this. While it can cover your losses should a customer or client cancel a job or return a product, it can also protect you against accidents, injuries or unexpected events that take place on your property, damage to your property/equipment or losses from inability to work due to an unexpected event. 

Professional business insurance is specifically designed for businesses with unique risks, such as those belonging to architects, engineers, lawyers and accountants (among others). It can cover anything your business can be found liable for, including honouring a lawsuit or paying damages due to an injury to an employee or customer or damage to their belongings.

Some professionals (such as those professionals treating patients in the medical field) face a higher financial risk than others and can be legally required to have broadform liability or professional indemnity insurance. There are also customised insurance products for those working in an office, in construction, as a business director or in a courier and delivery company — amongst many others. Most businesses will benefit from the combination of one or more types of coverage, customised to the unique risks they face.

What is Proffesional Business Insurance?

If you work in a profession as an architect, lawyer, accountant or engineer you can qualify for professional business insurance that's been created to address the unique risks you face on the job. As you can deal with larger volumes of money in these roles than other people might, this form of insurance is valuable because it can protect you against having a business asset lost, destroyed, damaged or stolen.

Even if you don't fall into any of these categories if you offer any specialised service to customers and have a niche area of expertise you may qualify for this type of insurance.

It can also protect you against claims made against your business by a client or third party based on something you did, failed to do or a breach of professional duty and all accompanying legal costs. This can be informed by the legislation or professional body that governs your industry or niche.

What is the difference between professional and Professional Indemnity insurance?

The next question you're probably asking yourself is whether your business will need professional insurance or professional indemnity insurance. The answer is that you could need both — or neither. Your best move is to consult a professional broker from a reputable company, such as Budget Insurance. Businesses are diverse and can differ dramatically from one another, therefore you'll probably benefit from customised coverage made up of a range of products and services. Here are a few of these products:

●      Business vehicle cover

●      Building cover

●      Business interruption cover

●      Office contents cover

●      Public liability cover

●      Theft cover

●      Cash cover

●      Fraud cover

●      Accounts receivable cover

●      Stock cover

Leslie is a single mother running a business from home. She has no physical store, instead making and selling customised watercolour pet portraits in her home studio before listing them on her website and mailing them to clients. She's also invested in frames and specialised printing and framing equipment.

Leslie wouldn't benefit from public or employee liability insurance, as she has no physical store or employees. However, she could benefit from insuring her equipment and having business interruption insurance, because if her machines break down it would leave her unable to generate an income. Because she sends her portraits to customers using a local courier service, she could also benefit from transit insurance, in case the vehicle delivering her portraits has an accident or is robbed.

Thabo has recently started a beekeeping business, which offers hive and bee removals as a service. He has a qualification in the field and is a member of many beekeeping associations. He also has four employees and cherry-picking equipment to reach hives in high places.

Thabo has a specialised skill in a niche area with different challenges and risks, therefore he opted for an insurance package including public liability insurance, amongst products protecting his employees and equipment. One day, Thabo's cherry picker malfunctions during a hive removal and an employee accidentally damages the cladding and gutter of a client's home and breaks their hand as well. Liability insurance protects Thabo from having to pay for the repair to the house out of his own pocket while also paying for the employee's care and compensating them for the loss of income while they recover.

How can i make a claim ?

As no two business claims are alike, the process you will need to follow to make a claim — and the outcome of that claim — can depend on many things. In most cases, it will depend on whether you took reasonable steps to prevent the incident from taking place and addressed the aftermath quickly and honestly. It can also depend on your past claim history and the likelihood of the incident recurring.

For example, if it was found that Thabo failed to service or maintain his cherry picker, his claim might not get paid out. Additionally, if investigations into acceptable beekeeping practices found that Thabo deviated from the generally recommended course of action as agreed upon by a beekeeping oversight body, this might also result in a rejection.

Get professional business insurance from Budget Insurance today!

Now that you know how all businesses can benefit from some form of business insurance, you'll want to know which products would suit you. You can request a quote here or find out if you need to upgrade your current policy by calling 0861 60 01 20.