Managing your costs is an important part of running a business, and can impact operating costs, profits and your creditworthiness. When it comes to purchasing insurance you may be asking yourself whether it’s necessary.
Managing your costs is an important part of running a business, and can impact operating costs, profits and your creditworthiness. When it comes to purchasing insurance you may be asking yourself whether it’s necessary.
Many businesses face all kinds of hazards, and insuring against these risks is likely to be a good idea. Beyond taking measures to protect your business, having insurance can also be seen as a sign of a viable and credit-worthy business for customers and investors alike.
We worked with our insurance partner, Superscript, to help highlight the circumstances where you might want your business to be insured, the types of insurance available to you and setting up cover.
When deciding whether you need business insurance, you’ll want to consider these main points:
1. Can I afford the cost of a claim? Whether it's against your business or for your business, the cost of a claim might exceed the cost of a policy premium and could potentially save you from making large or unexpected payouts.
2. Am I legally obliged to have insurance? The only insurance that might be required in the UK is employers’ liability insurance if you employ any staff. Of course, there are exceptions, but you could be fined if you don’t have it in place where necessary.
3. How can insurance provide more business opportunities? There are no guarantees that having insurance will generate more business for you. However, insurance can signal trust to your customers and investors.
You may want to consider how working with certain clients might require you to have adequate insurance to enter into a relationship with them. Equally, being a member of a professional organisation or trade body may require that you have certain covers in place, potentially impacting your business opportunities.
In most cases, you can insure your business at any time. You’ll probably want to consider how soon your business could be liable to a claim or be at risk, which will determine how soon you sort your insurance. Even before you start taking on work you could be exposed to risk, For example, a start-up might want to insure its new equipment, like laptops, before it starts trading officially.
There might be situations where purchasing flexibility is available, such as wanting to buy your business insurance now and delaying its start date, or purchasing retroactive cover. These types can help businesses get cover in situations where they might have been trading without adequate insurance, potentially providing them with protection for any unknown claims made relating to a period before you had the insurance in place. To be clear, you’ll unlikely get cover for claims you knew about before getting insurance.
Business insurance is a broad term which can include a number of different insurance products. These products are each designed to protect your business against potential legal and compensation costs arising from a range of risks.
Individual covers provide different protections; you can choose a range of covers to make up your business insurance. The correct range of covers is designed to protect you from the risks posed to both you and your business, and the risks to others that come from operating your business.
Having the right insurance in place for your needs will help provide adequate cover, should you need to make a claim. Talk to your broker about removing covers that are not relevant for your business; it might help save you money.
There are many different types of possible cover available. Those that might be right for your business will depend on what it is you do, the industry you work in and the size of your business. There are some common covers that most businesses might consider:
Public liability
Public liability insurance is available across most industries. It’s designed to cover legal and compensation costs if a member of the public is injured, or their property damaged, as a result of your business’ potential negligence.
Professional indemnity
Professional indemnity is another available cover designed to provide legal and compensation cover for businesses offering professional services, like advice and consultancy,. This cover might be particularly important for companies that work contractually and risk claims for breach of contract and acts of errors or omissions.
Employers liability
Employers liability insurance is similar to public liability in terms of what is potentially covered. Employer’s liability concerns employees rather than members of the public, meaning that it's designed to cover legal and compensation costs associated with accidental injury to your employees during the course of them carrying out the actions the business asks of them.
In most cases, this cover is mandatory for employers in the UK, and it’s worth being aware that if you employ people and you don’t have employers’ liability insurance, you may receive a fine of up to £2,500 for each day you’re without it!
Cyber liability
If you’re a business dealing with personally identifiable information (PII), cyber liability might be one of your considerations. PII includes data such as payment card information and medical records, where the stakes are high.
Cyber liability is designed to cover risks that come with storing and handling this data, such as accidental privacy breaches, hacking and cybercrime and business interruption as a result of a cyber security breach affecting your systems or those of your suppliers.
What information do you need to get covered?
Getting insurance cover for your business is usually not as complicated as it seems. To complete a quote for insurance you’ll typically need the following information to hand:
Getting insurance cover for your business needn’t be complicated. To complete a quote for insurance, you’ll typically need the following information to hand:
● Your business type - are you a sole trader, limited company or partnership?
● What your business does - what industry do you work in, what type of work do you carry out?
● Your business turnover - how much money do you expect to receive for your work over a 12 month period?
● Where your business operates - does your work cover the UK only or will you be serving other territories too?
● Details of your employees - if you have any.
● Whether you have cover in place currently - and if you do, your renewal date if you know it
Depending on what your business does, there may be some other information required to get the right cover for your needs.
Superscript’s customisable cover helps give small businesses and self-employed professionals the freedom to adjust cover as things change. Get covered in minutes. Get a quote
Disclaimer: Individual cover purchased online is offered on a standardised, non-advised basis and is not bespoke. Terms, conditions and coverage limits are predetermined by the Underwriter. If you require bespoke coverage offered on an advised basis, please contact our in-house broking team.
Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority. FRN 656459.
