Everything you need to know about insuring your small business

Business people negotiating a contract
Business people negotiating a contract, they are pointing on a document and discussing together

After all these years of putting it off you’ve finally decided to go it alone and launch your own business. The opportunity has been identified, the technology is in place, the customers are waiting, and now the fun begins. Except… that you’ve forgotten one of those annoying but vital pieces of red tape that can lead to big problems if not identified: Insurance.

Do I need it?

Probably. If you have staff then definitely, in the form of employers’ liability insurance. Much of your need for insurance depends on the field in which you are working, as your clients may demand that you are insured against certain risks before doing business with you. If there is any possibility of someone using the business injuring themselves or suffering a loss, then public liability is mandatory to cover compensation and legal expenses.

That includes visits to your premises, or visits by you to theirs. Therefore, although it might seem another troubling cost for a fledgling business, it could prevent financial catastrophe. The lowest standard general level of coverage is £1m, which should be more than enough for small businesses in the early months, but worth checking if bigger clients hop on board.

Public liability might not cover all circumstances. For example, will you be visiting building sites, laboratories, workshops or other areas that might equate to a slightly higher level of risk? Do you have such facilities on site? If so, check the small print to show that you’re covered and discuss it with insurance experts.

Excess

The small business might not have a strong cash flow and you’ll be looking for ways to save money, including choosing a high excess to knock down monthly payments. Be careful that your excess would not destroy you in the event of a claim.

Employer’s liability

As stated, if you employ staff then you’ll need employers’ liability insurance, with a minimum allowable cover limit of £5m. Check that your policy covers freelance, part time, seasonal or occasional workers.

Also, ascertain exactly what the policy would cover if something did happen to a member of staff. For example, if an irreplaceable managerial figure was injured, what would happen? Would the policy cover lost income to the company? If not and you consider your new team of workers invaluable then take out key person insurance, which will not indemnify the actual losses incurred, but will give out a fixed monetary sum.

Professional indemnity

Also referred to as professional liability insurance or PI insurance, this covers legal costs and expenses if you are alleged to have carried out inadequate service. The legal costs will cover a court case in the event that you dispute the claim, which could be brought about through the loss of files, equipment or data, a breach of copyright, or defamation or libel. For many companies PI is mandatory (if attempting to win a contract, for example) and vital for peace of mind for others. Even a change in a project plan might be liable for a claim.

Contents

Do you have expensive or irreplaceable machinery or technology on site? Even if thieves try and fail to get inside they might damage doors and windows, so it’s worth getting some form of protection. Aim to cover thefts, damage away from the office, accidental damage and loss of data.

Author Bio :- Arun is a Technical content writer at Hopinfirst, a leading mobile app development company which provides best ios app development and Android app development Services.

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