Guide to Common Risk Policies

Common Risks Policies
Businesses in a given sector like manufacturing or retailing often face a common set of risks. These may be covered by a single insurance policy rather buying different elements of cover from separate insurers. For example:

Small office insurance: Contents, computers, business interruption, employers and public liability, money and negotiables, portable equipment

Home office: Employers and public liability, office contents and computers

Other typical common risk packages are available for builders and tradesmen; pubs, hotels, restaurants and takeaways; the motor trade; different types of retailers and manufacturers.

Regulation
From 14 January 2005, general insurance has been subject to statutory regulation by the Financial Services Authority. Practitioners will have to be authorised and will be required to comply with strict rules governing the conduct of business.

The Financial Services Compensation Scheme
In the event that an insurer goes out of business, the policyholder has some protection under the Financial Services Compensation Scheme (FSCS). The FSCS may transfer the policy to a solvent insurer or provide a new policy.

Where this cannot be done:

Compulsory insurances such as third party motor and employers' liability insurance are covered in full for all businesses.

Compensation for non-compulsory general insurance is restricted to small businesses (i.e. with turnover under £1m). The first £2,000 of the claim is protected in full. For larger claims, policyholders are protected to 90% of the value that their policy would have paid.