It will not be a cakewalk after you set up your business in London. You should be prepared to face all the challenges to run your business, but you shouldn’t care about what might happen if your computer breaks whilst you’re trying to manage tight finances.
Business insurance -sometimes called commercial insurance- protects your business and employers -if you have any- in case of an unfortunate event at an unpredictable timing.
There are always risks such as accidents that might damage your properties, bankruptcy because of bad economic and financial circumstances, or even legal expenses caused by a mistake. Some of these protections are already mandatory, others, you should consider getting even if you are not legally obligated to have.
Another advantage of having business insurance is the credibility it adds to your business. It’s easier to build trust with your customers if you have business insurance.
There are a lot of different insurance types and their coverage varies according to the type and their budgets. Also, you need to have some of these insurances by law, others are optional.
Laws in the UK requires you to have;
- employers’ liability insurance to compensate for the costs of the time when employers’ injuries or illnesses because of work.
- commercial motor insurance if your business owns vehicles.
- professional indemnity -sometimes called professional liability- insurance to cover the costs of mistakes by you or somebody else that affects your business negatively.
Although you’re not really legally obliged to have professional indemnity insurance, probably every expert will tell you to get one. You should also consider getting;
- liability insurance -especially public liability insurance- to cover the costs of damages caused by the negligence or fault of any member of society.
- cyber insurance to cover your losses caused by damaged IT equipment, systems, and networks.
- commercial property insurance to protect the tools of your trade.
- home insurance if you’re working from home.
You can get abovementioned insurances to protect the fundamentals of your business, and it will take almost no time for you to recover in any scale disaster scenario. You might also need other types of insurances related to the needs of your business.
Questions To Ask Before You Decide On A Business Insurance
You should start with asking yourself “do I need business insurance?” The answer is most probably, yes. The following questions will be about the type of business structure. For example, you don’t need employers’ liability insurance if you’re a sole trader.
Do I Really Need Business Insurance?
You can ask yourself this question if you run a solo business by yourself, and only with yourself, working at home. In this case, any type of business insurance might not seem compulsory. You might even have your personal bank account as your business account in some cases. Still, it’s a good idea to at least ask a legal advisor who is experienced in business insurance before you decide “not” to get business insurance.
What Type Of Business Insurance Do I Need?
The answer depends on different aspects of your business such as your business structure, your inventory, office, and numbers of employees among other details. It is usually good to have public liability insurance if you own an office (even your home) or a store where your clients and customers visit to see you, buy your products or services. It covers your expenses if any injury or property damage claims by your clients or members of the public cause legal processes.
You might even skip getting professional indemnity insurance in some cases or your business might legally be obliged to have public liability insurance. You can learn which insurances you might need from your local authority. But, you should have employers’ liability insurance if you’re not a sole trader and have employees. You can get help from an expert to decide which insurances work best for your business.
Can I Get Business Insurance Without Registering My Business?
Although it’s better to register your business before buying business insurance, you don’t have to do it in that order.
You need some information to get your insurance including your business address, business structure, and projected turnover. However, you won’t need your company registration number or other business registration details you can get only if you register your company.
Where Can I Buy Business Insurance?
You can buy insurance from an insurance broker through the British Insurance Brokers’ Association (BIBA) or directly from an insurance company.