What is insurance?

Protecting against the risks associated with every day life is essential to everyone’s well-being and peace of mind. Insurance is a way of allowing people to minimize their individual financial damages by combining their potential for loss with that of others.

Although many types of insurance seem complicated, the basic principles are straightforward. Insurance companies assess the risk of any eventuality and the potential downside associated with it. Then, based on past experience and their own expertise, insurance companies calculate the 'premium' that a customer needs to pay to provide ‘cover’ against injury or loss. When the insured event happens, the company pays out the agreed level of ‘claim’.

Professional advise

The best way to understand the insurance cover that is required is to talk this through with an independent insurance broker. You should always ensure that the broker specialises in business or commercial insurance.

Also, with effect from 15th January 2005, all insurance brokers must be authorised and regulated by the Financial Services Authority. You should always get more than one insurance quote so that you can compare not only the price that has been quoted but more importantly the cover provided.

This is meant as a general guide and is by no means a definitive, legal guide - so please ensure that you use it for information only. Business insurance policies vary greatly from company to company, so the services of a professional financial consultant in aiding your choices would be of substantial help in the end.