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Insuring Your Business
When starting a new business, you will no doubt recognise the need for insurance. It can provide compensation and peace of mind should things go wrong but can also represent a significant cost.
In this factsheet we consider the different types of insurance you need to consider.
Employers’ liability insurance is compulsory to cover your employees. By law you must have at least £5 million of cover although a minimum of £10 million is now provided by most policies. You must display the certificate of insurance in the workplace. If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory employers’ liability insurance. Limited companies with only one employee, where that employee also owns 50% or more of the company’s shares, have also been exempt from compulsory employers’ liability insurance.
Motor vehicles liability insurance is also compulsory and must cover third party insurance, this is the legal minimum.
Other categories of insurance are optional and a decision as to whether or not you need cover under any given heading will depend on the nature of your business and an assessment of the risks.
Working from home
If you are planning to start your new business from home then don’t assume that your normal household insurance will be enough. It will not usually cover business risks. It is possible to obtain special ‘working from home’ policies.
It may be stating the obvious but it is important to shop around to get the best deal. You should obtain several quotes and always be wary of cheap deals. A personal recommendation may be the best way to decide.
Level of cover
Again it may be stating the obvious but too much cover and your cash flow will suffer, too little and the consequences can be catastrophic.
Consider the level of cover you need. With buildings and equipment make sure you are covered for the full replacement cost.
If there is to be an excess on any policy make sure that it is set at a sensible level.
How we can help
Please talk to us if you would like any further help on insuring your business.
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