Insurance for start-ups: make sure your new business is covered today!
The beginning of the year is one of the most popular times to start a new business. After months of planning, your business plan is ready to put into action and ideas finally become reality. However, a common oversight by start up businesses is to have no business insurance in place when they start work for a client.
It may seem like overkill insuring your new business for millions of pounds against claims, but start ups are at particular risk; a claim made against you, no matter how small, could lead to disaster for the business’ finances before it’s even off the ground. In addition to this, many clients will require you to have insurance in place before they will award you a contract.
There are several business insurance covers available for start ups that can give you the peace of mind that if a project doesn’t quite go to plan, you will be covered.
Professional indemnity insurance
Professional indemnity insurance provides cover in the event of an allegation or claim being made against you for providing poor or negligent advice. Consultants, teachers, contractors and freelancers should give consideration to professional indemnity insurance; if you were to make a mistake in your work, it would cover you. Many clients and professional bodies will require you to have professional indemnity cover before they will award you a contract or allow you to become a member, so it is worth checking before arranging cover.
Public liability insurance
Public liability insurance is essential for any business that comes into contact with members of the public, regardless of whether clients visit your place of work, or you go to theirs. If you cause damage to a third party or their property, public liability insurance will cover the legal expenses and costs in defending a claim made against you for the damage caused as well as awards for damages if you are unsuccessful in defending the claim.
Employer’s liability insurance
If your business will employ staff, even on a temporary or part time basis, you must have employer’s liability insurance by law. Cover is provided for your employees for claims due to injury or illness as a result of their activities under your employment.
Directors and officers liability insurance
If you are establishing your business as a limited company, and you will be a director, you should give consideration to directors and officers insurance. As a director of a company, you have a responsibility to carry out your duties with reasonable skill and attention, and act in good faith in the company’s interests. If something goes wrong, you may be held personally liable by shareholders or others that have a financial interest in the company. Cover is provided for defending you as a director or officer of your business against allegations of wrongful acts and any damages subsequently awarded against you. If a claim is brought against you without directors and officers insurance in place, you may have to settle them out of your own pocket.
Business equipment and office insurance
Just because most start ups are based at home doesn’t mean they are not free from risk. Your laptop, mobile phone and other business equipment could be stolen, lost or irreparably damaged. For example, if you work as a graphic designer, imagine if your computer was stolen; not only would there be the cost of replacing the hardware, but expensive design software too. In addition to this, the knock on effects of being unable to complete work could cost your business heavily. Business equipment insurance can cover the tools of your trade against such risks.
If you own a dedicated office premises, buildings and contents insurance covers against flood, fire, theft and other perils.
Business interruption insurance
Business interruption covers against loss of income and/or additional expenses incurred in order to continue trading due to an unforeseen incident preventing you from using your normal place of work. This could be, for example, if there is a fire at your office and you are unable to work there. While it may seem unlikely, many businesses struggle to operate as normal following an unforeseen disaster.
Claiming on your insurance
Finally, if you are aware of any circumstance or incident that you have reason to suppose might give rise to a claim, notify your insurer as soon as you can. The sooner your insurer is notified, the sooner they can help.
Markel direct can provide instant cover for your start up business from £4.20 a month over ten interest free instalments, helping you spread the cost while your new business grows.
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