Thursday, July 05, 2012

Tips for Finding Business Insurance for Your Small Business

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.