Starting a business, or growing a business, is an exciting step but there’s often a steep learning curve associated with it
One of those learning curves can be insurance - and it can be difficult to know what kind of insurance you need, if your business is new.
When it comes to business insurance, the client is the expert of their business. That’s why it’s important for business owners to take the time to build a relationship with their insurer to help them to understand the nature of their business so that they can guide you through the range of insurance cover options you might need.
An adviser will ask you a range of questions to find out how your business works, if you need or have premises, the type of equipment you use, any stock held, if you carry out work on site, visit a business premises or a client’s home and whether you employ others to carry out work for you.
All of this can impact the kind of cover you might need – from public liability to employers liability and more specific or specialist cover such as cyber insurance, professional indemnity, legal expenses, directors’ & officers’ policy, and credit insurance.
If it’s a larger business with a number of employees, premises/workshop or manufacturing facilities, usually your insurer will want to visit you to carry out an in person assessment of the types of cover you may need to consider.
There are a few main areas an advisor will talk to you about and public liability is a key one. Unlike employers liability, which is compulsory, public liability is not a legal requirement, but I would suggest that is vital coverage for any business.
If you are providing any service that is delivered off site, in a home or business premises, you could be open to a claim against you for any mistake or error made while working.
For example, if a plumber is working at a house and a subsequent leak was discovered - which may be attributed to faulty work - the plumber could be liable for a claim. Perhaps a spark from soldiering pipes causes a fire – again the plumber could be open to a claim.
Public liability insurance provides financial protection against claims made due to errors or mistakes being made in work.
Public liability can be more valuable to a self-employed business owner because they would shoulder the whole burden of fighting liability claims, whereas a limited company by its very nature ‘limits’ your personal liability should a claim be made against you.
Material damage cover might also be worth considering depending on the nature of your business. This cover insures you against damage or accidental loss to your physical assets, including your buildings, contents, plant, and equipment, fit out and stock – for example loss of stock through a fire or tools or equipment being stolen from a van or site.”
If you use a van or have vehicles for staff use, you’ll a need to look at van or fleet insurance. This can be set up on an ‘open drive’ basis which allows staff to take any vehicle that’s covered. In this case, it is important to disclose to your insurer if any employee has convictions or penalty points.
Dependent upon on the circumstances, it may be the case that the insurer will restrict that person to a particular vehicle, apply a greater excess whilst they are driving, or they could even exclude them from driving altogether.
Insurance only really reveals its full protection in the event of a claim, so it’s your insurers’ job to assess your business and cover needs and explain the protection against the risks in a way that is tangible to a new business owner.
:: Daniel McClintock is commercial account executive at AbbeyAutoline (https://www.abbeyautoline.co.uk/)
