What is Startup Insurance?

Choosing the right startup insurance for your business

Running your own business is infinitely rewarding by giving you the ultimate freedom to be your own boss, but that doesn’t mean it isn’t without its challenges. This can be even more so the case in the event of something going wrong, as it is up to you to fix it. This is why if you run a startup it is essential that you take out startup insurance in order to protect you, your business and your staff.

Why do you need small business insurance?

Without having small business insurance, you could find that your startup ends up with crippling costs in the event that something goes wrong. For example, in the event of a fire, theft on your premises, an injury to an employee or a third-party you could end up having to finance huge bills relating to compensation, repairing damage to a property or replacing equipment.  Without insurance, these costs could have huge financial consequences for your small business. It could lead to a loss of profit, having to layoff staff, and in the worst case scenario, it may even lead to your company going out of business. But according to AXA Insurance, over 60% of new startups do not have any kind of small business insurance in place. However, if you have a small business insurance policy, you will be able to claim for replacements, damage caused,  as well as receive help to cover the cost of compensation.

Small business insurance can protect you in the event of fire or flood damage to your premises.
In addition, it is important to note that even without an accident occurring in your business, you could end up in financial difficulty due to fines incurred as a result of not having an insurance policy. This is because insurance is a legal requirement in order to protect the employees at your company, and you could end up being fined up to £2,500 each day you do not have insurance in place.

What type of insurance do I need for my startup?

There isn’t one specific type of insurance that will suit all startups. The insurance you choose will be dependent on a number of factors, such as the amount of risk entailed in the business as well as the kind of business you run. However, these policy covers tend to be the most popular with startups:

Public liability insurance

This type of insurance can help you cover the cost of compensation, in the event that a member of the public is injured, or their property is in some way damaged and your business is responsible for this happening. This insurance can include the costs of medical bills or time-off work due to an incident at your business. The amount of cover you choose is dependent upon the insurance provider you choose, with some only providing up to £5 million for small businesses, whilst others providing up to £10 million in cover. The cover will also be dependent on the amount of risk involved in your business. For example, if you are a bricklayer, electrician,  or a plumber you may want to look at having a higher level of cover than if you were a personal trainer or beauty therapist.

Employers liability insurance

As previously mentioned, it is a legal requirement for businesses to ensure they have an insurance policy in place to protect their employees, and this specifically relates to employer’s liability insurance.  This policy cover ensures that staff members are protected in the event of needing to ask for compensation to cover the cost of loss of income, legal expenses or medical bills. Depending on the insurance company, you may be able to get coverage that will pay for expenses up to £10 million.

Product liability insurance

Product liability insurance is a type of cover that you will need if your company sells products to the general public as if something was to go wrong, by law your company would be held responsible for any damage or harm caused as a result of the product. This policy ensures that the insurance company will pay out for replacement stock, or damage caused to a customer who purchased your product.

Professional indemnity

Depending on your profession you may need to look at also getting professional indemnity insurance.
This kind of insurance is commonly taken out by financial advisors, dentists, lawyers, or any other field of work that relies heavily on giving professional guidance and advice to its clients. This policy cover will able to help pay towards legal expenses as well as any compensation bills that need to be paid as a result of a customer wanting to pursue legal action, based upon advice that you had given that they feel unhappy with and this has led them to experience financial loss, or they want to take legal action as a result of them believing that you have been negligent.

Insurance cover for deliveries and vehicles

It is possible to protect the vehicles you use as part of your business (for example, for transportation, or used as part of a courier delivery system) in the event of them becoming damaged or stolen (due to a road accident, flood or fire damage). This kind of cover can ensure that you can sort out replacement vehicles should you need them, allowing your business to carry on as usual.

Business interruption

If your company becomes a victim of a robbery, meaning that perhaps you have experienced damage to both the contents and buildings of your business (and perhaps have caused injury to staff members too, insurance can help to you recover the costs, by allowing you to claim back any revenue you have lost, providing that you are able to provide the right documentation needed to make a claim.

Choosing the right small business insurance

We understand that there are a number of different insurance policies available on the market, which can end up making it difficult to know which is the right option for you, with so many to choose from.We work with a number of the leading insurance specialists for small businesses around the country, meaning that we can help to provide advice for a wide range of startups and help you to find the very best policies and offers to suit your companies requirements.