With so many types of business insurance available, knowing where to start and which is the right one for you can be difficult. Insurance policies can differ depending on the size and type of business you own, your available insurance budget and whether any of your customers have specific insurance requirements.
When starting a business, protecting yourself with the appropriate insurance ensures you’ll avoid damaging payouts if things don’t go the way you’d planned. Here, we’ll detail the key areas of business insurance, including the various types available and the circumstances that surround specific markets and their respective insurance.
Best for: Running a business from home.
Although you’ll probably have a home contents insurance policy, it might not be robust enough to sufficiently cover items such as business equipment and stock if you work from home. An upgrade from a domestic to a business policy will offer greater protection. Business equipment that you take on the road, such as laptops, smartphones and iPads should also be sufficiently covered.
Transparency is key here; make it clear to your insurer what you need covered and why. Otherwise, you could be faced with serious costs if you need to make a claim, in case of fire for example.
Best for: Running a business which offers a service or advice e.g. a consultant, architect or accountant.
This insurance is integral to these kinds of businesses as it covers against claims of negligence and poor advice including slander, misrepresentation, errors, omissions and unintentional breaches of confidence. Without it, these kinds of mistakes could cost you dearly in compensation.
Additionally, clients may want to check your professional indemnity policy is in place before doing business with you. Before taking out this policy, it’s worth investigating what level of cover your clients will be expecting.
Best for: Running a business where members of the public or customers visit the premises, or you visit customers.
If any claims are made against your business for loss or injury, public liability insurance will help to protect you from these. For instance, if someone trips over in your business premises, then public liability insurance would cover you for any compensation claims made against you.
Compulsory for: Any business that takes on a permanent, temporary or seasonal employee.
Employers’ liability insurance is mandatory, as it protects you from any claims arising from illness or injury that have been sustained by an employee in the workplace. Most insurers automatically provide £10 million worth of cover, which is more than enough to cover the vast majority of SMEs.
The only businesses which may not require employers’ liability insurance are those operated out of the owner’s home, and employing only close relatives.
Best for: Tradesmen working in other people’s homes.
It’s important to ensure that the correct insurance is in place if your business involves working in other people’s homes. In addition to public liability insurance, you’ll need to safeguard yourself against any damages to property and injuries caused while at work. Likewise, personal accident insurance to cover medical expenses and loss of earnings while recovering from injury at work will also be necessary.
Best for: Any business which will transport clients, customers or members of the public in privately-owned cars.
If you have existing car insurance, then you may need to upgrade it to include business use, especially if you’re running a business which involves driving clients around, such as prospective tenants in the case of estate agents.
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As well as the type of cover required, there are a few other factors to consider when insuring your business.
When looking at buying insurance, it’s essential that you identify what you’ll actually need from it. Consider what the worst-case scenario for your business might be, and how you can protect yourself from the situations you might predict. Ask yourself what your most valuable asset is, and how your business would be affected in its absence.
A very important step in buying business insurance is determining how much money you’ll receive in the event of a claim. The sum insured is the maximum amount your insurer will pay out; if the sum insured does not cover the total value of what you’re insuring, then you’ll lose out.
Since insurance policies don’t cover everything, it’s essential you read over the terms and conditions to check that they protect against risks you may face. Is it reliable in a way that will pay off in the event of a claim? Additionally, there may be certain requirements that must be met to ensure that the policy remains valid, so it’s worth making sure the terms have been fully understood.
You can speak to a broker to clear up anything you don’t understand or to clarify that all aspects of the business are covered by the policies. They can identify risks you might not have been aware of and highlight the deals that best suit your circumstances.
As your business grows, your insurance policy will need to be updated too. Without regular reviews of any policies your business has in place, you might leave yourself open to losses. Regularly check-up and review your policies to ensure you avoid financial problems down the line.
Gazprom Energy is a leading and award-winning business energy supplier, helping thousands of small businesses manage their gas and electricity contracts. To find out more about what we can offer your business, visit the homepage or call us today on 0161 837 3395.
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