Running a business can carry an array of risks; therefore, if you are starting a business, you should arrange to take out insurance policies that will cover the risks applying in your case. However, as there are many different types of business insurance, you need to tread carefully when trying to decide which of them to opt for.
- Whatever your needs, they will include employers’ liability insurance
Of the various kinds of business insurance, the only one that is legally necessary for every single business in the UK is employers’ liability insurance. For employing anyone, your company will need minimum cover of £5m, Startups.co.uk explains – and, for each day that you run your business without this insurance, you will incur a fine of up to £2,500. There are only a few exceptions – for example, if your only employees are immediate family members – in the legislation.
Employers’ liability insurance is intended to cover compensation claims brought by employees should they, in the course of their work, suffer injury or damage. Such employees could include a waiter who breaks his leg from tripping on a loose floorboard in a restaurant or an office worker who, having been heavily engaged in computer work, develops repetitive strain injury (RSI).
- However, you might also need motor insurance
In the UK, motor insurance is legally required for any vehicle before it can be driven on UK roads. Therefore, it naturally follows that, if you don’t rely on driving a vehicle for business purposes, motor insurance isn’t one of the flavours of business insurance that you need to concern yourself with.
However, if you have already taken out motor insurance before deciding to start your business, you might assume that this insurance would cover corporate use of the vehicle in question. This would be a risky assumption, as not all motor insurance policies actually include this cover!
Check your existing policy. Even if it doesn’t cover work-related activities, you could add this cover typically inexpensively – it is even free from some insurers.
- Consider the importance of public liability insurance
Technically, public liability insurance isn’t legally compulsory for every UK business. However, you might find that your own business needs it in practice – at least to be successful and bring peace of mind. Public liability insurance will cover you in case you accidentally inflict damage to property or people when you work. Startups.co.uk cautions: “Many clients won’t deal with you or can’t legally deal with you unless you have it, so you might consider it to be obligatory.”
For a greater insight into why you might need this insurance, smallbusiness.co.uk has posted a case study of the video production company Reel Media. Ben Newth, its director, has explained that his company requires public liability insurance because “if we were out filming and a member of the public tripped over our equipment, we’d be covered if they chose to claim against us.”
- Enlist a broker’s help when seeking business insurance
Whatever varieties of business insurance you have decided that your particular business needs, you shouldn’t be shy about accepting help with looking for it. After all, deciding what type of insurance you require isn’t sufficient; you also need to decide on specific policies, which can vary.
Asked about how he got his cover in place, Newth revealed: “I’m not great at shopping around. I was recommended a broker by a professional body I belonged to and I’ve been with them ever since.” He added: “The process of setting the cover up was fairly straightforward and I think using a broker took a lot of the legwork out of it.”
Impartial advice can be received from an independent broker such as Be Wiser. This FCA-regulated and approved company is outpacing many other UK brokers in growth and, from its offices in Andover in Hampshire, supplies attractive policies in public liability insurance, tradesman insurance, office insurance, surgery insurance, and other types of business insurance.
- Don’t underestimate the worth of business insurance
Of course, your business doesn’t want to end up in the uncomfortable situation where it needs to dip into its insurance. Fortunately, by diligently making sure that all of the relevant checks are in place, your company might be able to avoid ever needing to do so. However, this doesn’t take away from the value of business insurance as a safeguard to enact.
Newth aptly summarises this value as thus: “The importance of insurance is similar to the need to back up your data. 99 times out of 100 you won’t need it but that one time you do you’re so glad you have it!” He adds that, when universities and schools pre-check companies before releasing students on placements, they want to see cover that would protect the students if there was an accident.