If you own a small business or are in the
process of forming a start-up, you will no doubt be considering what type of business insurance to have
in place to cover the risks associated with your particular trade or
profession. Should you opt for public
liability insurance, professional indemnity insurance, employers’ liability
insurance, business property insurance, key person insurance, business
interruption service …?
An important decision to make, aside from
which type(s) of cover you’ll need is how much cover to take out to adequately
protect your business. Check any
existing or potential contracts with clients for details of any types and
values of cover they would expect you to have in place, and also speak with any
professional body or trade organisation that covers your type of business for
impartial advice.
Then you need to check the details of the
terms and conditions in all of the quotes you receive for your cover, to see
whether there are any significant exclusions or conditions that would reduce
your ability to claim. Perhaps a policy with a low premium might exclude claims
that arise from using electrical equipment (useless if you are an electrician,
say); or perhaps it limits the number of claims you could make in a year (what
if you are sued more than once?).
There are fewer companies that offer
business insurance than offer car or home insurance, so there are fewer
policies to choose between.
Nevertheless, the insurers are keen to get and retain your business and
if you find a cheaper quote for the same or similar cover it is worth taking
that to your current insurer or to other insurers that offer you a quote and
haggling.
You should make sure that any insurer you
choose to take your policy/policies from is reputable and has a proven track
record of paying out on claims and for good customer service. The last thing you want, when faced with a
letter from a customer threatening to sue, or with a fire at your business
premises, is a company that won’t answer the phone or that gives you the
run-around.
Check online customer reviews to check
whether you would be happy to take your insurance from that particular company.
Needless to say, the best thing you can do
to protect yourself against having to claim against your insurance is to reduce
risks as far as possible by taking steps such as installing smoke detectors and
sprinkler system, sturdy locks and burglar alarms, and making sure that you and
your staff are fully aware of health and safety issues.
The more years you can manage without
making a claim, the more no-claims bonus you will accrue and the lower your
business insurance premiums will be.
Finally, don’t reduce the amount of cover
you buy just to reduce your premiums: think carefully about how much cover you
will need and stick to that because reducing your cover is a false economy that
could ultimately ruin your business.
