How to Set Up Small Business Insurance in Five Easy Steps
Why do I need business insurance?
Setting up any business is hard. From figuring out your USP to jumping through all the legal hoops, there is a lot to juggle and organise; one such thing is your business insurance. Whilst this may be far down on your to-do list, it still forms an essential part of your entrepreneurial journey.
Not only are some policies a legal requirement, such as Employer’s Liability, but taking out the right insurance could save you from a hefty financial loss.
How do I get insurance for my small business?
If you have never stepped into the world of commercial insurance, it can seem quite daunting. To help, we have compiled a step-by-step guide as to how you can go about setting up your business insurance.
Commercial insurance is not one-size-fits-all, so your insurance experience will be as unique as your business. This basic outline will help you understand the initial stages, as well as indicate where further advice should be sought.
Step 1) Identify what type of company you are registered as
This will affect what sort of policies you might need to take out. The two main types include operating as a sole trader and as a limited company. Sole traders make all the business decisions and keep all profits after paying tax, whereas limited companies are legally separate from the people who own it and are typically run by one or more directors.
The key differences lie in the financial liability of debts and how you keep records and taxes. Head on over to the UK.gov website here for more information, and to view the full list of registration types.
Step 2) Collate all your documentation
This is not only good practice in general but will also make your insurance journey significantly easier!
Business structure, annual turnover, number of employees, and insurance claims history are all essential for brokers and providers to give a quote. If you have this information to hand prior to contacting a broker, you’ll save both time and energy.
Step 3) Research what policies you might need
Whilst we don’t expect you to become experts, familiarising yourself with the options available can help future conversations. Having collected and reviewed your documentation, you will know exactly what may need insuring – yes, even that lone hammer in the store cupboard!
Typical policies include Public Liability, Professional Indemnity, and Contents cover. Beyond Employer’s Liability, each sector also has its own specific covers based on their risk factors. For instance, if you own a construction or electrical company it is probably a good idea to take out Public Liability and Hired-In Plant cover. For more information, why don’t you check out our ‘Start Up Business Insurance’ page?
Step 4) Reduce your premiums in advance
Step 2 is just one of the many ways you can reduce premiums before you even look at a policy. It sounds obvious, but avoiding claims through safe practice is the number one way to reduce your premiums; through clear procedures and processes, you can help protect you and your employees.
We also recommend not renewing automatically and getting in touch with your broker to ensure that you are getting the most competitive rates. Your business may have changed over the year, so a review of operations and assets will never go amiss.
Step 5) Get in touch with a broker!
The next best step is to get in touch with a broker. Brokers are intermediaries between you and insurers who ensure you are fully covered for the best price. Depending on your needs, we would recommend getting in touch with a broker who specialises in your sector or industry, particularly in high-risk industries such as engineering, manufacturing, and healthcare.
Brokers understand policy wordings and can spot when covers would result in you being underinsured. With their expertise in the sector, they have up-to-date information surrounding regulations and laws that could affect your policy. They can also stay with your company, becoming a risk advisor to help you and your employees continue to grow.
Once you have had a conversation with your broker, they will talk you through the next steps. It could be a site visit to check requirements, or they could start researching potential covers. You can ask questions at any point, so do not be afraid to get clarification if you are confused.
Our Client Directors promise a personalised service and appreciate the care that every business deserves.
