Commercial Insurance – What you need to know.
By Tafflab Mentor and Trustee Peter Wright
As a trading business you will need to have suitable insurance cover to protect both you and your customers. There are various types that will be relevant for a start-up business, but fortunately these are often bundled into one package for small businesses and all the major Insurance Companies provide those that are critical ones for Tafflab start-up businesses.
Most can be found on-line either via insurance consolidators like www.gocompare.com, or www.moneysupermarket.com, or www.confused.com. Or if you already have personal insurance or life cover with a company, then check out their websites directly as they may offer you a better deal as an existing customer.
The key types of cover that you require are as follows:-
Professional Indemnity Insurance
This provides you with protection if a client sues you. Not only do you need it to protect your business, but many professional bodies, Trade Associations and larger clients will require you to have this before they work with you. Typical cover of £250k – £500k .
Public Liability Insurance
Anyone can claim against your business for an injury or any damage done to them or their property which has happened when you were working for them (e.g. painting or decorating, home beauty services, or repairing personal items such as laptops etc.). This could cover damage to their goods or some form of injury e.g. an injury caused by simply tripping over your laptop bag. Again typical amounts are £250k- £500k.
Product Liability Insurance
If you design, make, sell or install products you must have this cover. If your product causes injury to the customer or damage to their property, then you may be liable to pay compensation and legal fees to them. This is particularly for any cosmetic or other beauty products/services. Amounts again as above.
Buildings & Office Insurance
You may operate your business from home initially or in very modest surroundings, but they are not free from risk and typical home insurance cover will not cover business items. You will need this to cover your business equipment, tools, etc. These could be stolen or lost or irreparably damaged in a fire or flood. Not only will you have to foot the bill for replacing everything, but also you may not able to work until the replacements arrive.
Employers Liability Insurance
You must have this cover by law if your business employs staff, even on a temporary or part-time basis. If an employee is injured at work or becomes ill through working for you, then you must have employers’ liability cover.