Stride guide to small business insurance
You want your small business to go from strength to strength, but the truth is that a few adverse events can spell insolvency for even the most promising of small enterprises. This could be theft of equipment you rely on, or a customer claiming you gave the wrong advice – anything that takes up valuable time or threatens profits could mean disaster.
Thankfully, small business insurance can help to keep your business safe from a range of risks. There are a number of different types of policy that can be selected to reflect the risk of your specific business. Let's look at some of the different types of insurance you might consider.
- Employer's liability insurance
This is a legal requirement if you have one or more employees, even casual, temporary ones. This might include you if you have a limited company and don't own at least 50% of the shares. There are a few exemptions, such as some small family businesses. Employer's liability insurance provides cover in case your employee is injured or becomes ill as a result of their work.
- Public liability insurance
This protects you against claims from members of the public who are injured or have property damaged on your premises or due to your activities. If you come into physical contact with members of the public, either on your premises or elsewhere, this type of insurance is invaluable.
- Business premises insurance
There are all kinds of risks which could damage your business premises – fire, flood, storm damage, or even terrorism. If you lease your premises then your landlord will usually be responsible for this insurance, but check your lease. If you own the building then you will need sufficient cover to pay for a full rebuild. Not all policies include cover for accidental damage, so consider whether you would like this.
- Business contents insurance
This type of insurance is not required by law, but it makes sense to take it out – especially if your business uses expensive equipment. It provides cover if items within your premises are stolen or destroyed. You can choose cover that would either pay the value of the item at the time of loss (indemnity) or replace it new-for-old. The latter option is likely to be more expensive.
- Professional indemnity insurance
If you offer advice as a professional which your client later concludes to have been negligent, they could potentially pursue you to recover any money they lose as a result. Even if you only make recommendations, for example about the best computer system for a client, you could be challenged in court. Professional indemnity insurance provides cover against this type of claim.
- Business credit insurance
Late or non-payment of invoices is a major problem for small businesses. If one client enters insolvency, the impact on cash flow can be severe and even risk the business' credit rating and long-term viability. Credit insurance helps you judge the level of risk for each of your customers and suppliers, and provides protection in the event of a failure to pay.
- Specialist insurance
Other types of insurance might be required by your business, depending on the nature of your work. For example, removal companies require insurance to cover goods in transit, while professionals who need to carry large amounts of cash with them will need additional cover.
- Impact on other insurance policies
You should also consider whether other policies you hold are impacted by your business activities. For example, if you work from home frequently, or invite clients to meetings in your property, this could invalidate your home insurance policy. Likewise, if you use a personal car for business purposes then your insurer may refuse cover in the event of a claim. It is important to check your policy carefully to make sure.
The cost of insurance
Once you have decided on the policies your business needs, it is likely to be cheaper to insure all of the risk with a single insurer, rather than take out separate policies for each type of risk. This may also be easier to manage and renew.
The cost of premiums will depend on many factors, such as what your business does, the size of your annual turnover, the number of people you employee and whether any claims have been made against you in the past. It will also depend on your level of contact with the public.
Do you need better insurance to protect your small business? Why not ask Stride Insurance to provide a quote?