Business Continuity For Dummies

Arranging the Appropriate Cover for Your Business

No doubt you want to know how to locate and purchase the insurance cover that’s appropriate for your business; at least we hope so, because that’s what we discuss in this section. As part of your BC programme, look into identifying the insurable risks to which your business is exposed. You’re then able to discuss your requirements for a suitable policy with your insurance broker or insurer. Of course, the business that you’re in dictates what other cover may be necessary. For example, manufacturers need product liability and professional advisers need professional indemnity (the earlier section ‘Covering against business risks’ has more on these covers).

Deciding on the right level of cover

Make sure that you arrange the legal and contractual ‘needs to have’, along with property and public liability as your minimum cover.

You need to get the balance right, and so make sure that you don’t carry an excess that you can’t afford. An excess (sometimes called a deductible) is the first portion of a loss or claim that the policyholder agrees to pay on that claim. It can be voluntary (to obtain premium benefit) or compulsory (imposed for underwriting reasons).

Add the voluntary and compulsory excesses together to come to the total you must contribute to each claim, to make sure that you can afford the sum.

Insurance works on an indemnity ...