Starting up a new business? Don’t forget the insurance.

8th March, 2019

Starting up a new business is very exciting and being your own boss extremely rewarding. But it's also risky, because if anything goes wrong, the buck stops with you. That’s why you need to make sure you are adequately insured right from the start. Even if you’re working from home, there are a number of legal considerations when trading as a business and you need to be aware of the risks you face.

Some new businesses appear to be taking the concept of risk a bit too far. A recent survey by AXA of 500 businesses revealed that over half were operating without basic cover. Just 40% admitted they had some kind of insurance in place, with 60% of those that employed staff lacking basic cover for their workers, including workplace injury and illness, which means they are breaking the law.

Most business owners surveyed seem to have an under-appreciation of risk, with 72% believing their businesses were too small to need insurance. The fact is, whatever size your business, you need insurance, especially with claims not directly related to business activities more than doubling since 2014. This includes such scenarios as an employee slipping on a loose carpet, hurting their back lifting a heavy parcel, falling from step ladders, being scalded by a hot drink spill or sustaining repetitive strain injury from computer work.

So, what kind of cover should you have in place? There are three main liabilities to consider which protect your legal liability as a company: employers’, public and product. If you employ staff, including full and part time, freelancers and volunteers, you are legally required to have employers’ liability insurance. This protects you against claims by an employee incurring injury or damage as a result of working for you. You need at least £5m worth of cover and you could be fined up to £2,500 for every day that you don’t have insurance.

Public liability is worth considering if you come into contact with the public, whether customers come to your premises, you visit client premises, or you work in public, and provides cover against a claim if someone blames injury or damage on your business. For example, if their car is damaged by something falling from your scaffolding while you are carrying out work. Product liability protects you if a product you sell causes injury or damage to a member of the public, such as a toy with a manufacturing fault that causes injury to a child.

You should consider professional indemnity if you provide a service or advice, such as accountancy, law, financial advice, architecture, healthcare, graphic design or marketing. This covers you against claims by a third party of professional negligence, including breaching confidentiality, infringing copyright, or giving advice that causes your client to lose money. Likewise, if you’re a contactor, you should consider Contractors All Risks, as it covers you against damage to a property and third party injury or damage.

Depending on your industry sector or size of business, there are various other covers you should consider, such as buildings and contents, accidental damage, business interruption, Directors and Officers’ Liability, cyber attack, tools and equipment, motor or personal accident. If your business faces more risks, covers can be grouped together in one bespoke package.

With extensive experience of helping to provide start-ups with affordable, tailored insurance, Routen Chaplin is happy to advise on the level and amount of cover you need to have in place. We currently insure over 6,000 local businesses and individuals and have been providing insurance solutions for the people and businesses of Long Eaton, Derbyshire and Nottinghamshire for over 50 years.

To talk to Routen Chaplin about start-up insurance for your business, call 0115 973 4437 or email insurance@routenchaplin.co.uk


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