Sorting your insurance is one of the most important parts of setting up and running a business.
The right policy can provide vital back-up if someone sues you business, or if you’re hit by a disaster like a fire or flood. Here are our top tips for buying a business insurance policy.
Get to grips with cover types
Before you buy, make sure you know your public liability insurance from your professional indemnity cover and that you’re clear on the insurance that’s relevant to your business. Check out our guide for an explanation of the main types of business insurance, including claims examples.
Check how much cover you need
The only type of business insurance that’s required by law is employers’ liability insurance. If you have any staff, you’re usually required to have at least £5 million of cover. For other insurance types like professional indemnity and public liability, check your professional bodies and your client contracts to see if you’re expected to have a particular level of cover. When you’re selecting cover levels also think about the risks your business faces and the possible extent of compensation claims.
Answer questions accurately
Whether you’re buying insurance online or over the phone, give precise details about your business and accurately estimate things like rebuilding and replacement costs. Be sure to tell your insurer about any previous claims and be honest about the security you’ve got in place. If you fail to tell your insurer something important, it may mean that a future claim isn’t paid.
Watch the details
When you’re comparing business insurance policies, check the conditions and exclusions, which usually tell you situations that your insurance won’t cover. Also look at the excess amount, which is the part of the claim that you’ll have to pay. Check the insurers’ claims processes to make sure you’re not going to face a massive hassle if you need to claim, and compare customer reviews of the insurers to make sure you’re opting for a trustworthy brand.
Download our small business insurance guide for an explanation of the main business insurance types, plus lots more tips for buying your policy and other handy insurance information.