A guide to picking the right insurance for your business

Without an adequate insurance policy to cover your back at all times, your business could face financial ruin. Here's how to avoid that fate.

Building a business requires stamina, determination, hard work, tenacity and a strength that will carry your company to the highest heights. However, with the nature of a competitive market, no matter the field of business you have entered, there is always uncertainty. And business insurance is one way of easing that uncertainty. You may be turning around a healthy sum of money a year, but if there was an unfortunate accident at work, emergency or situation which could arise, your business would suffer. Without an adequate insurance policy to cover your back at all times, your business could face financial ruin and years of hard work can disappear in a matter of minutes.

Insurance is a tricky business, no matter the need, but business insurance is a whole other kettle of fish. Commercial estate agents Savoy Stewart sought to investigate the different varieties of insurance policies which can keep your business in check, if something were to go wrong. Be aware, that some policies are only suitable for some businesses and you must check the terms and conditions before signing the dotted line.

Business property insurance

If you’re in the business of owning property, for a commercial purpose; whether it be a shop, gym, office block or retail store, business property insurance is a must-have. The policy will cover any damage and loss to your business, including vandalism, theft, fire and or adverse weather conditions which would cause damage to your property. The policy cover, encompasses everything in your property – so the furniture, documents, equipment etc. If you cannot find an insurance policy that covers you for everything you need, consider looking at a number of policies that will.

Commercial motor insurance

When you set up a business with the intention of hiring drivers for deliveries, collections and call-outs, you must ensure you have commercial motor insurance; which is entirely different to your standard car insurance. There are three main types of motor insurance for your business. The first is third party insurance – which is the minimum required by law. Third party insurance covers you from the costs associated with injuries to others or damage to your vehicle. Third party fire and theft is a step up – with added protection against your vehicle being stolen or destroyed, or damaged in the case of a fire. And lastly, comprehensive insurance covers you for everything and you can add various add-ons if you wish.

Employer’s liability insurance

If you have employees, whether they are full-time or part-time workers, as an employer you are legally obliged to have employer’s liability insurance. If you risk not taking out this particular policy, you will face a fine of £2,500 every day you’re uninsured. The reason for having this policy in place, is if one of your employees becomes ill due to their work, or injured whilst working, they could seek compensation. Pay-outs can be extremely costly, depending on the circumstance. This policy will bear the cost of this compensation claim, as well as legal costs. The only time you don’t need liability insurance is if your business has no employees, or hires only family members.

Product liability insurance

If your business plan is to sell, design and produce a physical product, then you are definitely in need of product liability insurance. If, unfortunately, a product turns out to be faulty or defective, you will be legally responsible for any injuries or damage caused to anyone who has had that product and or damage to their property. Even if your business does not produce the products, you can still be held accountable if the product has your business name on it, if the product has been imported from outside of the EU and if your business takes responsibility for the repair, replacement or refurbishing of that product.

Public liability insurance

As a business, you are not always in one place the entire time. Perhaps you regularly visit clients and customers come to your premises a lot? Public liability insurance safe guards you from any claims of compensation if someone outside of the company suffers an injury at your property, or if their property was damaged due to your business. Every policy will of course vary, but the majority will include cover for any incidents that happen whilst on your business premises, as well as any incidents which occur at a function, event or during an activity that has been organised by your business.

So when you’re in the first phase of launching your business, no matter the type of business you are undertaking, ensure you shop around and read up on the type of business insurance or multiple policies you may need cover for. After all, without it, you could find your business collapsing very easily. Without adequate protection, all the hard work you have put in will have gone to waste.

This article was supplied by Savoy Stewart.

Further reading on insurance

Ben Lobel

Ben Lobel

Ben Lobel was the editor of SmallBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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