What Insurance Do You Need For A Start Up Business?
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Transcript of What Insurance Do You Need For A Start Up Business?
What Insurance Do You
Need For A Start-up?
When Y
ou’r
e F
irst
Sta
rtin
g O
ut…
Many people dream of running their own
business. It’s a great way to be independent and
work for yourself. Benefits of running your own
business include;
Controlling Your Work/Life Balance
Choosing Who You Work With
Controlling Your Own Destiny!It’s no wonder that many people want to run their
own business, but there are many considerations.
One consideration that is often overlooked by
start-ups is insurance.
Do I R
eally
Need
Insu
rance
?
Well, yes – you do. The types of insurance you need
will depend on the nature of your business. But there
are common insurance plans needed for all
businesses. Insurance for a start-up is essential
because; It protects you from any claims made against you
up to a certain value. It keeps your commercial property covered for
damage and repairs. Some insurance, like employers liability insurance,
is a legal requirement if you have one or more
employee.You do need insurance, but it can be difficult to know
where to start. Let’s explore the types of insurance that
might be needed for a start-up in a bit more detail.
Sm
all
Busi
ness
In
sura
nce
Most small business insurance policies are divided up
into a number of categories including;
Property Insurance – this covers your commercial
premises, or the premises you visit during the
course of your work. Liability Insurance – this protects you against
claims from employers or members of the public
that come about as a result of things like accident
or injury. Vehicle Insurance – this covers any vehicles used
during the course of your daily work.
There are many different sub-sets of insurance for
businesses, so it is necessary to choose insurance
based on the individual needs of your business. So what
insurance do start-ups need most often?
Offi
ce Insu
rance If you have an office that is your place of business, then you are definitely
going to want office insurance to protect your commercial property.
Depending on the nature of your business you should be aware of the
following features when searching for your policy;
Contents Cover – if the contents of your building are essential to
your business, for example if you’re a metalworker and need
equipment to do your job, then you may want contents cover for any
losses or theft.Repairs – if you don’t think that you will be able to afford any
unexpected building repairs, which can often be the case with start-
ups, then you should definitely find a policy that covers commercial
property repairs in case some come up.
Unpredictable Risks – it’s wise to insure yourself against
unforeseen events that could damage your business premises. For
example typical cover may include floods, fire, vandalism and
malicious damage.Decide what you really need, because it can vary. For example a self-
employed person may not need contents cover if they work from home
and have separate insurance for the contents of their house.
Van Insu
rance
Many young businesses don’t need office insurance
because they travel to locations for their work and
don’t have a central office. Tradesmen are a good
example of this, for example a plumber will head out
to various locations each day taking his equipment
in a van.
If you need van insurance look for the following
features in your policy;
Guaranteed Courtesy Car – if you can get a
policy with a guaranteed courtesy car when
your van is broken down or being repaired you
will be better off as you won’t run the risk of
losing business because you’re unable to
travel. Multiple Drivers – getting employees insured
on a van can relieve the practical
considerations of travelling, and some policies
allow you to add and remove drivers online
very easily.Audio, Sat-Nav & Equipment – using a
satellite navigation system is very effective for
getting to a location quickly and easily, but it
can be quite expensive. Cover for sat-nav and
any audio or digital equipment used by your
car can be useful if it breaks or is stolen.
Van insurance isn’t necessary for every business,
but it can be very useful if you travel to different
locations for your work.
Em
plo
yers
Li
abili
ty
Insu
rance
Let’s just start by saying that this insurance is a legal requirement
if you have one or more employees. This means if you don’t
have it, you may be breaking the law. So if you have any
employees – it is essential. The main aim of employers liability insurance is to help if a claim
from employees who are injured or become ill whilst working for is
made against you.It has been estimated that half of the UK’s small businesses are
unknowingly breaking the law by not having employers liability
insurance. Look for the following in your policy;
Extensive Cover – legally you will require cover up to £5
million pounds. Try to get more cover, depending on the size
of your business.
What Staff Does It Cover? – if you have temporary staff,
they may not be covered by your policy. Make sure you find
out what types of staff are covered so you don’t end up
facing a claim from an employee you are not protected
against. Legal Help – is there a helpline you can call in case of any
emergencies or to get advice? Good support means you’re
more likely to make the right decision.
Employers liability insurance is probably the most important
insurance a business with one or more employees will need.
Remember if you don’t have it you may face prosecution.
Public
Lia
bili
ty
Insu
rance
This is also a very important aspect of business insurance.
The essence of public liability insurance is that it protects you
against claims from members of the public who are injured or
have an accident on your property - or in the case of
tradesman, the property you are working in.
It essentially covers any property damage or injury
compensation claims, keep an eye out for the following
features when looking for a policy;
High Level Of Protection – public claims for injury are
relatively common, look for extensive cover depending on
the size of your business. Remember, a larger business
is more likely to have claims made against it. A typical
level of cover is around £10,000,000.
Court Compensation – a good public liability policy will
compensate you for any time spent in court, which can
offset any business you might be losing.
Temporary Staff Cover – as with employers liability
insurance, you may want temporary staff covered by your
policy. This way if someone makes a claim against them
you are protected.Claims for compensation from the public from things like trips
or falls are very common, so it’s worth having yourself
protected as a start-up because any accidents could see you
facing costly legal fees.
Profe
ssio
nal
Indem
nit
y In
sura
nce
Even though your start-up might be very well protected from any
claims that might arise, it’s still possible that something could
happen. You could make a mistake, or receive some bad advice
that leads to a wrong decision.
This is where professional indemnity insurance comes into play,
it covers you in the event that you do something wrong. Look for
the following features depending on the level of protection you
might need;Extensive Cover – once again you will want a high level of
protection to cover compensation costs.
Paid Defence – if you are required in court, your indemnity
insurance may pay for your defence. This is a valuable
feature of indemnity insurance as it allows you to seek
counsel from solicitors and other legal professionals at no
cost to you.Industry Specific Policies – many indemnity insurance
providers will offer policies specific to an industry. For
example, accountants and architects may have a specific
set of needs which are laid out in an indemnity policy – look
out for policies tailored specifically to your industry for more
comprehensive cover.
Indemnity insurance is the last line of cover, it’s there in case you
do something wrong and can be very valuable if a claim is made
against you. It’s also a great way to get some peace of mind for
a young business that might want to make bold decisions.
Sta
rt-U
p
Busi
ness
In
sura
nce
Your business is very vulnerable in its early
stages; therefore you will want to have it
protected by insurance. Not only is business
insurance desirable for start-ups – it is also
legally required in some cases.Protect your start up early on, and be a stronger
business down the road.