Once you’re started your own business, it’s important to protect the future of your company (and your own financial security) by taking out the relevant insurance.
None of us has a crystal ball, so it’s impossible to know what lies around the corner or what potential hiccups will befall your new business over time. By insuring yourself properly, you keep your business protected, minimise some of the risk and reduce your potential stress and worry.
Here are a few of the common forms of insurance you should think about signing up for.
Employer’s liability insurance
As soon as you take on your first employee, you’re officially an employer – and that means taking out employer’s liability insurance (ELI). This cover you if the worst should happen and your new employee/employees are injured or become ill while employed by you.
- This is a legal requirement as soon as you become an employer.
- Your insurance must cover you for at least £5million and must come from an authorised insurer.
- You’re not legally required to provide ELI if you’re hiring a member of your family or your employee works abroad.
- You’ll be fined for every day you’re an employer and not properly insured – at a rate of £2,500 per day
- You can also be fined £1,000 for not displaying your ELI certificate.
Professional indemnity insurance
If something goes wrong when you’re providing a service to a customer – and the fault lies with your company – you can be liable to pay an indemnity payment to your customer.
Professional indemnity insurance provides cover should this happen. If you have to compensate a customer for loss or damages, as a result of your services, this can be an expensive cost to the business. Indemnity insurance covers the cost of this compensation and reduces the negative financial impact on your business.
Product liability insurance
If your company manufactures or sells physical products, there’s always the risk of your product being the cause of injury to a customer or member of the public. Product liability insurance covers you for the potential legal and compensation costs of this happening.
Public liability insurance
When you run a business where the public have access to your premises (retail, for example), or where you come into potential contact with the public (e.g. a scaffolding business), you’ll need to take out public liability insurance. This covers you should any member of the general public be injured as a result of coming into contact with your business.
Buildings and contents insurance
Your place of work is a vital asset to your business, so you need to insure your offices/workspace against any potential damage or disaster. If you’re only renting your building, you just need content insurance, to cover your equipment, furniture and other items that belong to the business. If you also own the premises, you’ll need to get full buildings insurance too to protect against fire, flooding or other catastrophic events.
If you need help deciding what insurance your business needs, give us a call on 01454 300 999 or drop an email to email@example.com
Find out more about the FD Works’ approach to finance at fd-works.co.uk