When you’re starting up a business, it’s easy to become overwhelmed by the sheer amount of work ahead of you. It takes a lot of hard work, planning and money to get a business off the ground and ensure its success in the first year. With so much to think about, insurance is often the last thing on your mind, but it’s actually one of the most important things you need to set up.
Not only is business insurance a legal requirement, but it can also be extremely beneficial to your company. Without adequate cover, your business could be at serious risk of closure if something does go wrong along the way. So, let’s look at the top things to know about setting up the right insurance for your start-up.
Determine which types of insurance you need
The first thing you’ll need to do is discover which types of business insurance your start-up needs. There’s actually quite a lot of different types out there, but you won’t need to invest in them all. Look for industry specific insurance policies, such as freelance insurance if you work within the freelancing sector.
Legally speaking, however, the types of cover you’ll most likely need include Public Liability or Professional Indemnity insurance.
- If you’re providing products and services to your clients or customers, Public Liability insurance is essential. It protects you against any claims made against you for injury or damages.
- Professional Indemnity insurance, on the other hand, is best suited to those offering advice based services.
So, why are these two types of insurance so important? Well, if you don’t have them and a claim is made against you, it could cost you a staggering amount of money. Would you be able to afford compensation, as well as the legal fees involved? Don’t underestimate how much this can all add up to, not to mention the damage it would cause to your reputation.
Things do go wrong sometimes, and you may not be able to avoid needing litigation and arbitration services, but having good insurance cover will limit the damage.
More specific insurance policies
Depending on the type of business you run, there may be some more specific insurance policies that your SME should be looking at.
Property insurance is essential if you own your office or have lots of business property, such as office equipment, computers and other inventory. This covers the costs should any of it be damaged by fire, vandalism or theft. Or if you have set up your business from home, then taking out or adapting your homeowner’s policy to cover damage to the home and office equipment inside it is advisable.
For businesses where employees do a lot of travelling, commercial auto insurance will protect vehicles carrying staff, products and equipment. Non-owned auto liability is a better option if employees drive their own cars for business, which protects the company if workers do not have enough or the right amount of insurance coverage.
Most businesses store a lot of sensitive and personal information about employees and clients, including addresses, financial details and more. The business is responsible for protecting such information, and data breach insurance policies are vital to prevent any losses should a breach happen electronically or hard copies be stolen.
Important things to consider
Once you’ve discovered which types of cover you need, it’s time for the real hard work to start – finding the best deal.
1. Cheap doesn’t always mean good
The main thing you need to keep in mind is that there is no “standard” cover. Different insurers will offer slightly different policies with varying terms and conditions. So, if you find a much cheaper deal, it could be that there’s a particular type of cover not included in the policy. It’s imperative you read through the small print to see what is and isn’t included.
2. Make sure that the provider is a trusted brand
Do as much research as you possibly can to ensure you’re not only choosing the best type of insurance but that you’re also going with a reliable provider.
Overall, choosing the right insurance and checking that it includes everything you need is vital for your start-up business. No business owner wants to think about the things that could potentially go wrong. However, unless you’re protected, you could end up losing your business further down the line. The above is just a basic guide to help you get started, but it is advised that you take the time to compare the different policies out there.
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