Start Up Companies and the Insurance Minefield

Uh whether you’re a a sole trader or a limited company, uh sole traders, you’re you’re actually personally liable for things going wrong. So, your house could be at risk. um as a limited company it’s it’s just as as risky because if there is something that goes wrong all the the investment you’ve made in the company will be at risk. So insurance is there to help you protect your assets as a as a person and as a company.

Uh first and foremost you need to meet legal requirements. There’s only one insurance module in the UK which is a legal requirement which is employers’ liability. So the moment you employ someone be it even someone on work experience or an apprentice you must have employers’ liability in place. Um secondly when we work with um small businesses and startup businesses it’s about getting the balance and act right. So you don’t want to purchase too much insurance but you don’t want to purchase too little. It’s about assessing the costs of the insurance and your cash flow. And one of the things we do is is create a plan. So you can have small amounts of insurance initially and can grow the levels of insurance as your business grows.

Firstly, employers liability that covers injury to your employees as a direct result of your business activities.
Secondly, public liability that covers injury to third parties or members of the public. It also includes property damage. So if if for instance you knocked a vase off of a client’s desk, that would be covered by a public liability policy.

Um next, we would highly recommend asset insurance. So insuring the assets of your business in the same manner that you’d insure your house. Remember that those feed through onto your balance sheet, and you need to protect your balance sheet.

Um next, if you’re a business that offers consultancy, advice, designs, plans, or or any form of professional advice, then consider professional indemnity. That will protect you if a client alleges that you’ve made a mistake in the course of your business or given wrongful advice.

Finally, think about the payment terms available. As a small business or a startup business, cash flow is important. There’s many insurers that offer interest free direct debit  facilities where rather than paying £500 or £1,000 upfront, you can you can spread the cost over 12 months and can help improve your cash flow.