If you own a start-up or small business, you’ll have a lot on your mind. Your income depends on the quality and quantity of your work, your marketing strategies and even the state of the economy, because you rely on people being able to afford your services or products.
But one thing you don’t need to lose sleep over is what would happen if you were sued by a client for personal injury or financial loss, or have your business premises and equipment destroyed, damaged or stolen. Those risks can be easily insured against, as would any related legal fees.
But if you’re a start-up or small business, you might feel that you can’t afford all of the different types of business insurance that you could possibly ever claim against. After all, no-one has a crystal ball and it can be hard to know what policies you’ll actually need and what policies you’d just be paying for without ever having to claim under.
If you can only buy one or two types of policy (particularly in the early months) then choose those that you are most likely to need. Generally speaking, those tend to be employers’ liability insurance (a legal requirement if you have anyone working for you) and public liability insurance. If you offer professional services or advice, then you would also need professional indemnity insurance.
Employers’ liability insurance would protect you if an employee were injured at work. It would pay for the compensation and any legal fees (yours and your employee’s).
Public liability insurance would pay for any compensation and legal fees if a member of the public (e.g. a customer, repairman, visitor, person on the street) was injured or suffered financial loss as a result of your negligence. Those sorts of claims happen more often than you might think, but after all, there are plenty of claims handlers and solicitors who can be relied upon to inform the public that ‘where there’s blame, there’s a claim’ and that they can sue with ease since they can do so on a no win, no fee basis.
Having insurance in place means that you wouldn’t have to worry if you received a solicitors’ letter through your door advising you that their client intended to sue. Of course, if you take all of the necessary precautions and undertake all the necessary training you should manage to avoid having to rely on your insurance, but accidents happen and people usually want to blame someone so that they can try to claim compensation. But if you don’t have to claim then at least you will be able to build up some no-claims bonus that will reduce your future years’ premiums. Then you might want to cover other risks with insurance such as business property cover as your business grows.
