If you own a workshop that you use for business purposes, it’s important to make sure it is sufficiently protected against potential risks to minimise the financial consequences you might face in the case of any unfortunate events.
Whether you work from home or in a commercial property, purchasing a suitable workshop insurance package can provide protection and security for your workshop.
While the key policies offered in a workshop insurance policy are similar across different sectors, you will need to take into account your specific industry and the circumstances of your business to make sure you are fully covered. For example, if you work out of a business premises, you may want to consider adding commercial property insurance into your package.
Some of the key policies you may be offered when comparing a workshop insurance package include:
- Public liability insurance:
Public liability insurance can provide financial assistance if you need to defend against and pay compensation for claims that your business is responsible for a member of the public suffering injury or illness. It can also offer cover if your business is at fault for damaging a third party’s property or possessions.
If you have members of the public visiting your workshop – whether this is to buy your products, use the workshop or watch demonstrations – public liability insurance can prove vital in protecting against claims that your workshop has caused them to become injured or ill, or has caused damage to their property.
If you manufacture or sell a product as part of your business model, you may benefit from product liability insurance, which can provide financial assistance if you need to defend against claims that your product has caused illness or injury to a third party. If you are involved in importing or exporting goods, you will need to make sure this is specified in your business liability insurance package. When valuing your products for import and export, some insurers may require you to split the turnover between each country.
For more information, visit our what is public liability insurance page.
- Employers’ liability insurance:
Employers’ liability insurance can provide financial assistance if your employee claims working for you has caused them to become ill or injured. If you employ staff in any capacity – whether paid or unpaid – you are legally required to purchase employers’ liability insurance.
- Professional indemnity insurance:
Within your workshop, you may offer design or manufacturing services – or related advice – to your clients and customers. If so, you may find it useful to purchase professional indemnity insurance. This cover can provide financial assistance if you need to defend against claims that your service or advice has caused your client or customer to suffer material, physical or financial loss.
- Buildings insurance:
Buildings insurance is potentially an essential part of your workshop insurance package. This cover can provide financial assistance if you need to repair or replace the main structure of your workshop and its permanent fixtures and fitting. You may need to do so if there is a fire or flood at your workshop, or if you have become the victim of vandalism. If you rent your workshop space, your landlord is likely to be responsible for purchasing buildings insurance, so it’s worth checking whether they have done so – and that the level of cover they have taken out is adequate for your business.
If your workshop is connected to your home, you may find your home insurance covers your workshop as an outbuilding, although some insurers may refuse to include your workshop if you intend to carry out high-risk activities such as working with heat and flammable materials. Insurers may also place a restriction on the value of items they insure under a home contents policy, so you may need to purchase specific business contents insurance for your workshop instead.
- Contents insurance:
Contents insurance can be useful whether you rent or own your workshop, as it can provide financial assistance if you need to repair or replace your business contents, tools and equipment after damage, theft or loss. While the specific contents you will need to cover will depend on what you use your workshop for, contents insurance can cover power tools, machinery, workshop equipment, computer equipment, portable equipment, stock, materials and supplies. It may help your insurance premiums if you can prove precautionary measures are in place – such as installing fire extinguishers and blankets – along with security cameras and padlocks.
You may consider purchasing separate business equipment insurance which can provide extra protection for the tools of your trade against theft and damage. If you hire equipment, tools or plant and machinery for your workshop, it is important to make sure your insurance covers contents that have been hired. When calculating the value of your contents, you’ll need to consider the current replacement value of each item, rather than the price you originally paid. It may also help to maintain a detailed inventory of all the items at your workshop to make things easier if you need to file a claim.
If you regularly travel with your business items, goods in transit insurance can provide protection for your contents while they are transported, while vehicle insurance can protect the vehicle you use against accidents and theft.
- Cash on premises cover:
Cash on premises cover can compensate any loss of business money you experience in the event of theft, and can often include personal assault cover, which can provide financial assistance with hospital bills if you are assaulted during a theft or attempted theft.
- Business interruption insurance:
If you are unable to trade due to an event covered in your insurance policy, business interruption insurance can compensate for any loss of revenue you experience during this time – and can also help with any costs associated with setting up in a temporary location.
- Personal accident insurance can also be included in your workshop insurance policy, and can provide financial assistance if you are unable to work because you have been seriously injured or become seriously ill.
Further covers you may be offered as part of a workshop insurance policy include:
- Business travel: useful if you travel overseas for business, this cover works similar to travel insurance and can provide assistance if you encounter problems during your travels.
- Terrorism cover: insurers may include terrorism cover as an option although it is usually specified as an exclusion. Terrorism cover can provide protection for yourself, your workshop and its contents in the event of a terrorist attack.
- Engineering insurance: this cover can provide financial assistance if you need to obtain the services of an engineer to inspect your items after damage.
- Cancellation: You may also be able to add cover for expenses you incur following the cancellation of an event or contract.