Insurance for Business
Setting up a business is an exciting time, and insurance is never going to be the first thing on your mind, but it is important to consider it as part of your planning.
Depending on your activities, it could be a significant expense that you need to build into cashflow (do not forget to consider credit costs for instalments).
For businesses with physical locations, different postcodes can affect the premium dramatically and covers may not be available in certain post code areas. These could include high flood risk areas or high theft risk. It is important to consider this when choosing the right premises for your business.
The insurance your company will need depends on what you will be doing however there are some core covers you must consider, a couple of these are a legal requirement, and I will start with those.
This is a compulsory insurance where you have employees. An employee, for insurance is anyone working for you, whether paid or not, under your direction and control. If you have chosen to form a limited company, and you will have two or more directors it becomes a legal requirement to have Employers Liability Cover in place.
If you are a sole trader then, family members are excluded from the requirements, though we would still recommend you have this cover in place in case the worst should happen.
An important cover that everyone should have though, is not compulsory by law (except for a few occupations such as riding schools). If you are working with other companies, this is the cover they will expect you to have and will often be compulsory under contract.
The cover provided is like Employers Liability, in that it covers your legal liability for Death, Disease, and Injury to members of the public and/or damage to third party property.
Just like with a private car, any company cars or commercial vehicles must be insured or declared SORN. Company Car insurance is often more expensive than private car insurance and you may find, at least at the start, that insuring privately and including business use is the way to go. However, if you have two or more vehicles owned in the business and/or directors names, in the long term a fleet insurance may be a better option.
Again, rarely a legal requirement but it can be for certain professions. This cover protects the company against legal liability arising from negligent advice or service. Clearly this will apply to training and coaching companies as well as traditional professions, architects, accountants, solicitors etc. However more companies are seeing the benefit of this cover, including care, sports/dance schools.
Material Damage/Property Damage
These covers relate to the physical loss and damage to your own property including buildings, contents, stock, tenants’ improvement (if you are renting premises and have updated the fixtures and fittings), electronic and computer equipment, and more. As the business grows you will invest in more assets and insurance cover for these is especially important to protect your investment. It is also advisable to get the proper advice on the rebuild cost of property, especially in the current climate where building costs continually increasing.
Linked to Material Damage is the business interruption cover which, following a significant loss (from an insured peril), will pay an income to the business to replace the income it would have had, had the incident not occurred. This is a complex area and advice should be sought to ensure the calculation is correct.
There are many other types of cover a business could look at, including Cyber Liability, Directors and Officers Liability, Goods in Transit, Money, Business Travel.
If you have an insurance broker, they should be your first stop for business advice. If you do not have an insurance broker or they can’t help, BuBul has a wide range of experts available. For more advice on business insurance, contact our expert Martin on firstname.lastname@example.org or call 01924 929070.
*We’ve picked experts we know and trust who are good at what they do. All of them will give you at least an extra 30 minutes free advice if you contact them and would then charge their normal prices. They do not pay to be on BuBul and don’t give us any money from anything they earn as an expert.