This is a guest post from Premierline Business Insurance Broker (Premierline), an insurance broker specialising in arranging business insurance for a range of UK businesses from micro SMEs to larger businesses with more complex insurance requirements.
Startups are new businesses that are still in the early stages of trading; usually at the point of looking for clients or outside investment to get them off the ground.
Insurance is something that can be easy to forget about or get wrong when setting up a new business venture. If you are looking at setting up a new business, or have just started a small business based in the UK it’s a good idea to speak to an insurance broker. Brokers, like Premierline, can give guidance and advice on the right covers needed to protect both your business and your livelihood.
Insurance covers for start-up businesses
When it comes to protecting your business, there are some key covers that you should consider that will give you the freedom to do what you love with the peace of mind that you are protected should disaster strike.
If you work in and around the public, you should consider public liability insurance.
This cover is designed to protect your legal liabilities if a member of the public or any third party is injured or their property is damaged because of your business activities, and they make a claim against you for damages.
Public liability isn’t a legal requirement for businesses. However, it’s a cover that can protect your business and give you peace of mind knowing that if the worst happens, you are covered.
More and more businesses are finding success in using digital platforms to reach new customers. They are becoming ever more reliant on data and technology, which is helping them reach wider audiences, develop new relationships and grow their business. But with this comes the risk of cybercrime.
The CSO reported that 88% of UK businesses had suffered a cyber-breach between 2019 and 2020, and according to cyber insurance specialists, Hiscox, an SME business, was hacked every 19 seconds in 2018.
There are different types of cybercrime, but the most common are phishing, malware, and brute force attacks.
Premierline works closely with Hiscox and other cyber insurance specialists to support your business in the event of an attack. Cyber insurance can potentially cover the costs involved in rectifying a breach, business interruption caused by a cyber-attack, damage that hackers may cause, managing extortion from a hacker, containing the crisis, the costs of protecting privacy and the costs, awards and settlements following legal action against you because of an online communication hack.
Start up businesses may be an easier target for cyber-criminals due to all of the different communications you will deal with in setting up a new business. Therefore, cyber insurance could be a key cover for many young businesses.
If your start up business is manufacturing, selling, or repairing a product, you may want to consider products liability insurance.
Products liability protects you if a customer claims against you for injury or damage to their property caused by your product.
Anyone who has been involved in the supply chain of the product can be brought into the claim, so consider products liability if your business relies on the manufacture, sale, service and/or repair of products.
As a start up business, you may be considering taking on employees in the future once your business is up and running. If you are planning on hiring staff, you will need employers’ liability insurance, which, unlike most insurance covers, is a legal requirement if you employ anyone under a contract of service. This can include freelancers or contractors. A usual exemption to this law is if you’re using an immediate family member as your employee, which a start-up company may do.
Unfortunately, accidents do happen in the workplace despite measures being put in place to prevent them, but employers’ liability can protect a business against claims for compensation due to an injury to any of your employees whilst they are at work.
Buildings and contents insurance
If your business has a brick and mortar, you may want to consider buildings and contents insurance. If you rent your space, you will need to speak with your landlord about who has the responsibility of arranging buildings insurance.
Buildings insurance typically covers the costs of replacing, rectifying or repairing damage to the structure of the building and its fixtures and fittings, including the costs of removing debris, repair of underground services and professional fees, such architect drawings or surveyors.
The cause of the damage is known as an insured event, and these events will be specified in your policy. Insured events can include fire, storm, flood, malicious damage, burst water tanks and more.
Business contents insurance covers the items inside your premises against similar insured events, but may be defined differently depending on your policy. Usually, the three groups covered under business contents are:
Electronic office equipment. This can include laptops, computers, printers and other electronic office equipment.
General contents. This broad category would include freestanding items that relate to your business use. This could include machines, display units, tills, televisions, tables and chairs, to name but a few.
Stock. This section would cover any items of stock that you may have at the premises from the raw materials up to the finished item. Sometimes insurers insist that high-risk stock such as cigarettes, alcohol, and nonferrous metals are listed separately.
It can seem complicated to define what an item is classified as, but a professional broker will be able to give you advice on this.
If your business suffers a flood, fire, theft, or other insured event, you may face a period where you are unable to trade.
Your contents and buildings insurance may cover the costs of replacing or repairing the physical items that you have lost due to an insured event, but you may face a loss of income if your business can’t trade. This is where business interruption insurance can support you, by covering you for the loss of gross profit while you recover from the event.
Business interruption insurance will continue to cover you up to the maximum indemnity period. This is set based on how long it will take your business to get back up and running and to the same trading levels you were at before the event occurred.
Why use an insurance broker?
When you look online, you can find a price comparison site for almost anything. Insurance products are no different. Within a matter of minutes, you can fill in a form and have hundreds of insurance quotes on your screen, usually with premium being the only consideration. However, do these quotes actually provide the cover you require to protect your business needs? This is one of the many reasons why you should consider using an insurance broker to help arrange your insurance and to ensure the cover meets your needs.
When you get in touch with an insurance broker, you will receive a bespoke service from an insurance professional, who will take the time to get to know you and your business. Brokers usually also work with a range of insurance providers to find the cover that is right for you and your business.
Brokers and insurers often have good relationships. On top of that, most commercial insurers will only deal with brokers rather than deal directly with the public. So if you’re in the market for insurance, you can usually receive access to a wider selection of insurers than if you used a comparison site for the same level of cover.