Business insurance in the United Kingdom can be quite confusing if you don't understand how the industry works. While there are as many types of cover as there are types of business, not every organization needs the same cover. Knowing how much protection you need is just as important as having the correct kind of protection and generally depends on the particular risks associated with your business. One important type of cover that has come to prominence recently is professional indemnity insurance

In the UK any business that operates with even one employee other than a sole trader is required by law to carry a minimum amount of £5 million in employer's liability insurance. This is to cover any injuries or illness sustained by an employee or former employee in the course of your company doing business. While this is the minimum, some businesses will need more protection and in some cases the law will mandate how much. In general, businesses that have a greater risk to employees are required to carry more employer's liability protection and this is also true for businesses with large staffs. Examples are anywhere that humans and machinery come in close contact like manufacturing and construction trades or large call centres.

When it comes to it most retailers and hospitality businesses carry from £1 million to £5 million depending on the size of the operation and the amount of business performed. While public liability is not actually mandatory, being in the middle of a legal case with no financial backing is very intimidating. Without the proper protection you leave yourself open to the most abused aspect of liability insurance which is frivolous claims against various forms of retail. To many business owners' dismay unscrupulous customers have staged falls and injuries to gain a settlement and even if you have irrefutable proof of the contrary, if you don't have financial backing for a proper defence you could lose the case anyway.

PI protection amounts are typically based of the perceived value of the service being provided. In most conservative estimates the minimum range of protection is one and one half times the perceived value, although this varies widely from industry and insurance provider. Most often in cases of consulting you are required to carry a minimum of £1 million in professional indemnity before you can be considered for a project and government positions require a specific amount for any position of consultation including IT consultation.

There are many other types of insurance cover that may be applicable in your situation. The amount of cover you need will depend on what your business does, how many people you employ and even what geographic area you operate in. Property insurance can vary greatly in price and protection from one region to another due to weather trends and known geological risks. Certain types of risks may not be covered by certain providers or may need a specific policy written just for them, what ever the situation may be the best rule of thumb is to assess your risks and always get as much coverage as you can afford. Just getting by with the bare minimum is a recipe for disaster, the cost of premiums far outweigh the costs of one accident requiring medical treatment or one act of nature requiring repairs.

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