When we meet people starting up their own businesses, particularly for the first time, we are always asked about the matters that they should be considering. Many of them are surprised, I’m not sure why, when we mention insurance, as it’s a business protection that none of us can do without. It would be easy to get carried away and insure against every eventuality, but there are some risks against which adequate insurance is an absolute must. Some of them are actually a legal requirement.

A lifeline against financial wipe-out

Take employer’s and public liability for example. Unless there is only you in the business, employer’s liability insurance is a mandatory requirement. Very few claims under these policies are made by small businesses, but for those few who do suffer a claim, it’s an absolute lifeline against financial wipe-out. Public liability is in the same category if you have business premises or go to work at someone else’s property. There are small business policies readily available to cover these risks as well as office contents, etc.

But what about slightly more specialist cover that might be needed for your particular business? Product liability if you’re selling goods; professional indemnity if you are providing services. Without adequate cover, you are again in wipe-out territory if a claim is successfully made. Although limited liability protection is available to those trading through a company, more and more cases are being taken against individuals rather than corporate entities.

Insurance can often be demanded by those providing funding to the business. The most common requirement is for there to be cover in the event of something happening to the person that makes the business tick – keyman cover as it is popularly known. And what happens if there are two of you involved in the business and something happens to one party? Does the survivor really want the estate of his or her former partner involved with the ongoing business? Almost certainly not, so should there be some form of insurance to provide a payment in these circumstances so that you can retain control of the business?

Determine which of these risks really affect your situation

Most of us will take out travel insurance for our holidays, but does that cover business trips? Are our employees covered on their car insurance for using their vehicles for business? The list and questions go on and on. The key is to determine which of these risks really affect your situation and then make sure you have adequate protection in place for you and your loved ones.