If you’re new to the world of business, you might not have encountered shopping for business insurance before. You’ll no doubt be familiar with shopping for car and home insurance, since most people take out those policies, and that you often have to shop around for a good quote. The same is true of business insurance, but there are quite a few types of business insurance to choose from and shop for, and some insurers offer bundles of policies for a discounted rate, whilst others might offer different types of insurance at highly competitive rates individually.
The first thing you need to do is ascertain what type of cover you need. Do you come into contact with the public, either in your premises or theirs (or off site)? If so, you should take out Public Liability Insurance to protect yourself in the event of a claim by a member of the public for an injury, death or loss/damage to property.
Do you have any employees? Think carefully about this one because the term ‘employee’ can be quite widely construed from a Health and Safety point of view. If you employ someone then you must have Employers’ Liability Insurance of at least £5,000,000 or face a fine and possible criminal charges.
Do you need to insure business premises? Or do you use a vehicle for your business? Check that your home insurance covers any business run from home, or buy a separate buildings and contents policy for any business premises you own, and check that your car insurance covers travel for business.
Do you sell, repair or manufacture goods? If so, do you need Product Liability Cover? Do you offer professional services such as giving advice or consultancy work? If so, you’ll need Professional Indemnity Insurance.
Once you’ve decided what you need and roughly how much cover you’ll require, then you need to choose an insurer. Most insurers will be authorised and regulated by the Financial Services Authority (FSA) and if you search online or through comparison sites it will be obvious which companies are legitimate. You can double check that an insurer is covered by the FSA by checking the FSA’s website or giving them a ring to ask.
You could seek advice from an insurance broker about the level of cover you need – not a bad idea if you’re new to the business. They can also find you adequate cover at a competitive rate. Choose an Independent insurance broker though, so that you know that you’re getting the best of a choice from all different companies and not just one that your broker is tied to.
Select your level of excess carefully – you can take a higher excess to reduce your premium, but make sure it’s one that you could realistically afford to pay.
Finally, check the small print of any policy you’re thinking of buying to make sure that any exclusions from their cover aren’t likely to apply to your business. Some insurers specifically exclude certain businesses or activities.
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