Business Insurance Can be a Saviour, Not a Financial Burden

In these tough financial times everyone is looking to cut costs to save money, home owners to business owners all want to reduce their bills.

Everyday we are told that we all need to tighten our belts over the coming months and in such times of crisis insurance can often be the first expense to be sacrificed by small businesses often being classed as a necessary evil, an invisible protection they hope they will never need. What most business fail to appreciate is the protection that insurance provides to their business and for sole traders, their livelihood.

Many tradesmen in the UK are finding work is drying up, for others it is impossible to find. As their income dwindles, unnecessary expenses have to be stopped. So first to go is business insurance, predominantly public liability insurance. The premiums are low, but because it isn't compulsory it gets canceled. The car is still insured, the house and TV are still insured, even the mobile phone is insured, but public liability - what is that covering?

As it doesn't cover anything you can touch or see it's not important. Well, it is covering the one thing that paid for the car, the house and the TV, your assets, your income, your livelihood.

Trading without public liability insurance is risky for any business, but if you are a tradesman it is too risky. Even before the financial turmoil started it would have been foolish to enter someone else's property without liability insurance. Now, in the throes of a possible recession the already high risk is increased further.

Fraudulent claims increase when unemployment increases. Your "customer" may want a new TV or a new carpet but haven't got the money to pay for them.

You were there last week fixing the boiler and "you walked oil through our house" so they say and low and behold they make claim against you. Now you know you didn't do it but you are an easy target, a sitting duck. Who else can they claim from? They haven't got their contents insured because it was too expensive so you are their only option.

Whilst a claim against you will have to prove you are legally liable, would you want your reputation ruined?

This loss may only be small but if you did cause more damage, could you pay for it? Have you self insured? Do you have thousands in the bank for any claims that occur? Of course you haven't, no one does. Would you be able to continue in business if you had to pay thousands of pounds in compensation to a customer whose house you had damaged? You don't need to be in that position, just see insurance for what it is, not an unnecessary expense but a necessary business protection.

Public liability insurance isn't that expensive. So if times are getting tough, think before you cancel. The consequences could be far greater than you realize.