The East Midlands has just been named as the second-best place to start a business in the UK, reflecting the boom in entrepreneurship in the region over recent years. But with all of the excitement and hard work that comes with setting up a new company, many business owners find themselves leaving vital business requirements like insurance until last on the to-do list. Here, Chris Bown, SME Account Handler at Cowens Survival Capability, explains why insurance should be a priority and gives his top tips for new business owners looking to set up their policies.
“Starting your own business is a life changing decision and there are a lot of factors to consider. Whilst, innovative business planning, exciting brain-storming and ambitious growth projections may be at the forefront of your mind during the first few months, it’s important to remember the essentials.
“We’ve seen entrepreneurs and new business owners take flight with their ventures at rapid rates, starting to take on work before they have the basics in place. It’s vital to remember that even in the first few weeks or days of trading, a claim could be made against an individual or their business, and if the correct cover is not in place, a big pay-out could stunt their growth or even put a stop to their business plans. Here are some tips to consider to ensure your business sets off to a flying start.”
Get professional help
In the age of Google and online comparison sites, there is a minefield of information out there when first starting your own business. Without specialist knowledge, this overload of policies and cover can become confusing. It is always best to speak to an expert in the field. By sitting down with an insurance broker, you can discuss exactly what your new business does and what you intend to do in the first year of trading. Through detailed discussions, your broker will be able to gauge exactly what policies you may need and for exactly what price. A bespoke business policy, designed specifically for your business, will ensure all of your insurance requirements are met.
Take into consideration all of your daily activities
Each and every business policy will be different dependent on the services provided. Most businesses will come into contact with the public on a regular basis, whether that is a marketing meeting, an electrical call-out to a residential address or a one to one session such as physio therapy. Even something as simple as a member of the public tripping over your bag could end in a nasty claim against your business. This means that for the majority of new business owners, public liability insurance is a must.
Does your business give advice? If so, professional indemnity is another essential cover to add to your portfolio of insurance to cover financial loss as a result of any professional advice, design or services you may have provided. This cover can also protect a business against defamation, breach of copyright and loss of documents and data. From financial advisors to architects, professional indemnity is an important part of a water-tight business policy for a whole host of business types.
Don’t forget to change your policies as your business grows
Many entrepreneurs start their new businesses with nothing more than a laptop and a home office. With a one-man-band, insurance requirements may be simple, but it is extremely easy to forget to build on your policies as the business grows and flourishes, especially if this success happens quickly.
It is essential to remember to consult your insurance broker on any changes that are happening within the company, as the majority of big business decisions will have ramifications on a claim if not properly incorporated into an existing policy. An example of this is taking on new staff members. When working for oneself as a sole trader, a business owner may not require employee liability insurance, but even adding one person to the payroll will make this type of cover essential to protect both the staff member and the business.
Perhaps the most important cover in terms of potential financial losses is always business interruption insurance. As a business grows, so may your spatial requirements, resulting in expansion into additional premises such as shops, warehouses or offices. This type of cover will protect material or stock damage at these premises in events such as floods, fires or theft. The interim period between the event and actually receiving the money for a claim can be months or sometimes years, resulting in huge financial losses and even closure for companies. With business interruption insurance, this can help to minimise loss of income as a result of a business interruption event.
If you’re looking to start your own business or have recently set up a company and would like some friendly advice from our small business team, get in touch with Cowens Survival Capability today on or 01623649931.