They say, where there’s blame there’s a claim. Because nowadays, even minor incidents can lead to major claims for compensation. So if you’re self-employed or you run a small business, it’s important you get the right cover in place.
But it can be difficult to know where to begin – especially if you’re just starting out. There are three main types of insurance you can put in place to protect your business: public liability, employer’s liability and professional indemnity insurance.
To find out what business insurance you might need, ask yourself these quick questions:
1. Do you employ people – even contractors or volunteers?
Employers’ liability insurance is a legal requirement if you employ staff – even part-time, temporary, voluntary, casual, or contract staff. Because if a member of your staff is injured or falls ill while working for you – you could face a major claim for compensation. What’s more, if you don’t have cover of at least £5 million, you could be prosecuted and fined.
2. Is there risk of damage, loss or injury at your place of work?
You might need public liability insurance. If you have visitors to your place of work, whether it’s your office or you’re home, there’s a chance they could slip or trip causing them to injure themselves. Or you could accidentally damage something while on your customer’s property. You might be held responsible and could face a costly claim for compensation.
A client might also insist that you have public liability cover before carrying out any work, and you could also need it if you want to exhibit at a conference or local trade show.
3. Do you give professional advice or provide a service?
If you give professional advice, maybe you’re a management consultant, or if you provide a service, perhaps you’re an accountant or a cleaner, then you should think seriously about taking out professional indemnity insurance. It’ll protect your business if you give bad advice or if someone questions the standard of your work.
Some professions need to have it – particularly if you’re a member of a professional body like the ICA, RICS or RIBA. Others choose to have it for complete peace of mind.
If you work from home, don’t assume you’ll be covered – most home insurance policies won’t cover anything related to your business. It’s likely you’ll have business equipment and you’ll probably store important business documents and information about your customers. You might even have some stock in the shed, garage or spare room.
So read your policy wording carefully and consider insuring your business property – and it’s also worth making sure you have a car insurance policy that covers it for business use. Remember, even successful and well-established businesses can fail without the right cover in place – just think about last years’ riots. Make sure you protect the future of your business with public liability, employers’ liability and professional indemnity cover.
The things you should look for in an insurance provider
Richard Stafford, commercial director at Quinn Insurance, outlines the things you should look for in an insurance provider.
Say the word ‘insurance’ and most owner-managers probably wont respond. But if your company is appropriately covered, it can be invaluable in maintaining your business reputation.
Check what additional services the insurance provider can supply to the business. Many insurers offer health and safety advice by compiling a risk assessment report. This can help businesses shore up previously unnoticed threats without creating any additional hassle for the company.
Additionally, the importance of working with an insurance provider who values processing claims quickly and effectively cannot be underestimated. Proactively handling claims helps SMEs avoid unnecessary legal costs, which could come to thousands of pounds.
Savings to be made
When margins are tight, businesses must save money wherever they can. Competition is intense amongst insurers and brokers alike and there are great savings to be made for any business willing to shop around. Do not to be afraid to ask for a competitive quote, provided it is within reason and that the policy on offer does not compromise the company’s needs.
When appointing an insurance provider it is important to enquire about their funds set aside for anticipated losses, to ensure that they can afford to pay out on claims should the business suffer a covered loss.
Having only ever worked in the insurance industry, many insurance providers have no real understanding of how different SMEs function on a daily basis. For an insurer to adequately serve its customers, it must have an insight into the sector and the environment in which it does business. Don’t be afraid to ask insurance providers should ask the insurance providers what particular experience they have.