Business insurance is purchased as a compliance item and its terms matter enormously at exactly one moment.
Main categories
Public liability, professional indemnity, property, business interruption and cyber.
Which cover different things and are frequently assumed to overlap.
Claims-made and occurrence
Whether cover attaches when the incident happened or when the claim is made.
Which matters when policies change or lapse.
Exclusions
Where the actual scope of a policy is defined.
Which is the section nobody reads.
Under-insurance
Insuring for less than replacement value.
Which can reduce a claim payment proportionally.
Business interruption
Cover for lost income when operations stop.
Which depends heavily on the trigger defined in the policy.
Recent years produced extensive litigation about exactly this.
Cyber cover
Data breach response, business interruption and liability.
Which is increasingly required by customers as a contract condition.
Policies frequently require specified security controls to be in place.
Brokers
Intermediaries who place cover and advise on scope.
Which is worth using for anything beyond simple cover.
Their duty and their remuneration are both worth understanding.
Notification
Telling the insurer promptly when something happens.
Which is a policy condition and is where claims get refused.
Directors and officers cover
Protection for individuals against claims arising from their role.
Which becomes relevant once there are outside investors or a formal board.
Independent directors frequently require it before joining.
Employment practices cover
Claims from employees regarding treatment or dismissal.
Which is a common exposure for growing employers.
Reviewing cover
Turnover, headcount, premises and activities all change what is needed.
Which makes an annual review necessary rather than optional.
Policies renewed unchanged for years are frequently wrong.
Cost against exposure
Premiums against the size of the loss being protected against.
Which is the calculation worth doing explicitly.
Insuring small predictable losses is generally poor value; insuring business-ending ones is not.
A general note
Policy terms and legal requirements differ by jurisdiction, and a broker or adviser is the appropriate source for specifics.
Product liability
Claims arising from goods supplied.
Which follows the product through the distribution chain.
Importers frequently carry the liability of a manufacturer.
Contractual requirements
Customers and landlords specifying minimum cover levels.
Which should be checked against what you actually hold.
Certificates are requested routinely in commercial contracts.
Excess levels
The amount you bear on each claim.
Which trades premium against exposure.
Raising the excess on high-frequency low-value claims is generally sensible.
Making a claim
Notification, evidence and cooperation with the insurer.
Which goes considerably better with records kept as events occur.
Disputes
Ombudsman or regulatory routes where a claim is refused.
Which exist in most jurisdictions and are free to use.
The practical review
Once a year, read what you hold, compare it against what the business now does, and ask a broker about the gaps.
Professional indemnity
Cover for claims arising from advice or professional services.
Which is required by regulators and by clients in many sectors.
Run-off cover after ceasing to trade is a related and frequently overlooked need.
Employers liability
Claims from employees for workplace injury.
Which is legally required in many jurisdictions.
Penalties for not holding it are significant.
Working with a broker
Describing the business accurately and completely.
Which is a duty and affects whether claims are paid.
Non-disclosure of material facts is a common reason for refusal.
Changes during the year
New activities, premises or higher turnover.
Which should be notified rather than left until renewal.
The practical summary
Read the policy once, review annually, disclose fully, and notify claims immediately.
Reviewing cover against risk
List what could seriously damage the business and check what is covered.
Which takes an hour and frequently finds a gap.
Most businesses are over-insured on small risks and under-insured on large ones.
The one-line summary
Read the exclusions, disclose everything, review annually, and notify promptly.
A closing caution
None of this is prescriptive. Businesses differ by sector, by scale and by stage, and practices that work well in one context fail in another for reasons that are not always visible from outside.
What is consistent is that the businesses handling these questions well tend to have written something down, measured it in a defined way, and reviewed it on a schedule rather than when a problem forces the issue.
Where a decision carries legal, tax or employment consequences, professional advice specific to your jurisdiction is worth the cost, and this article is general description rather than advice.
One more thing worth saying
Most of what is written about running a business is written by people selling something, which shapes what gets emphasised and what gets left out.
The unglamorous parts, keeping records, reading the contract, updating the forecast, rarely feature because nobody can sell them. They are also the parts that most reliably separate businesses that survive from businesses that do not.
Whatever you take from this, take the habit of writing the number down and looking at it again next month.