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How to Choose the Right Business Insurance Policy for My Startup

How to Choose the Right Business Insurance Policy for My Startup

Business insurance is one of those things that pinches a bit when you pay every month, but would hurt a lot more if you didn’t pay and something happens!

There are many types of business insurance, including employer’s liability insurance, professional indemnity insurance, product liability insurance and others. It’s important to know the differences in these types of cover as well as to understand which ones are vital for your particular business.

Some businesses are more at risk in certain areas than others. In this article, we’ll talk about how to choose the right business insurance for your particular field and area.

 

Do small businesses need insurance?

Insurance is an essential part of any business, big or small. The right insurance will buffer you from any loss for which you might be liable. The cause of this loss can range from anything including employee disputes, professional errors (whether actual or perceived), natural disasters and even disgruntled customers.

 

What type of insurance policies are there?

There are numerous types of insurance policies, each tailored to a specific business’s needs. Some of the areas of cover include:

 

Professional Indemnity Insurance

If you offer professional services or advice, this type of insurance is crucial. If a client makes claims against you, a good PII will cover the legal costs and any damage that might have been caused.

 

Public Liability Insurance

If a member of the public is injured, or their property damaged as a result of something you did, this insurance will cover you for it.

 

Employers’ Liability Insurance

This type of insurance offers protection for you if any of your employees become ill or are injured as a result of working for or with you. Even if you don’t have employees working for you, sometimes it is still necessary to take out this insurance.

 

Directors’ and Officers’ Liability

If you operate a freelance business through the vehicle of a Limited company, this insurance covers you in the event that you are ever held personally responsible for any loss incurred by someone else.

At Start My Business, we make the choice extremely simple. As part of our free small business insurance service, we get you to fill out a simple questionnaire and then we do the heavy lifting to find the right insurance policy for you so that you don’t have to sift through endless choices.

 

Is there any legal requirement to insure your business?

Certain insurances are required by law in the UK.

For example, if you employ people, you are legally obliged to take out the Employer’s Liability Insurance. If your business utilises motor vehicles of any sort — for example, vans or motorbikes or cars for delivering items or transporting people as part of your business duties — then you will need commercial motor cover.

If you wish to take a mortgage out on your business premises, your lender might only agree to the loan if you take out Business Buildings Insurance

 

How to choose your business insurance provider?

Choosing the right insurance provider and policy for your company is a slow, cumbersome task. The industry is filled with “legal-speak” and loopholes that could leave a person uninsured despite thinking they were.

Sites like MoneySupermarket and GoCompare provide detailed information on all the very many insurances out there. Still, they lack the personal touch of someone who can advise you individually on what exactly it is that you need.

When choosing an insurance provider or policy, the cost is, of course, a factor. But don’t be fooled into thinking that cheaper or more expensive is necessarily better. Read the fine print!

Quick Tip: Insurance companies whose headquarters are physically located in Gibraltar are generally able to offer slightly lower premiums to UK clients than their competitors because of Gibraltar’s tax-friendly regime. This was the case before Brexit and looks likely to be the case post-Brexit as a result of agreements made between the UK and Gibraltar.

It is essential to look deeply into what exactly that insurance covers you against. What liabilities are you protected against? Again — read the fine print!

Perusing reviews and testimonials is crucial. In the case of insurance, it’s best to look at reviews for companies who have been around for a long time. Too often, the “ugly “side of insurance only comes out when it’s time to make a claim. It’s unlikely that newcomers to the market will have sufficient claims made to merit an honest review of how they treat their clients when it’s time to “cough up.”

In all matters of business, things are more difficult when one is forced to deal with a “system” rather than with a human being. Even though a claim must go through that system, it’s important to find an insurance provider where you have a direct line to someone who cares about you and your business and who can explain the legalese to you simply and easily.