Taking out insurance is essential for any business, as having your back covered in any eventuality is key to making it through unprecedented periods and tough times. Before taking out insurance, however, there aspects of the process that should be considered. This is not just in order to make sure you’re getting the best deal but also so you won’t hit complications down the line.
Here, We shares five things to consider before taking out insurance:
Determine what insurance your business needs
There are a range of business insurance policies you can add to your cover, but the ones you’ll need most will depend on the size and nature of your company. For example, the amount of stock a business holds in different locations and carries in transit will determine the limit of Marine cargo insurance they’ll need. You may also be asked to hold a certain limit of insurance by an investor, or as part of a contract with a client.
You get what you pay for
It’s only natural to try and save money where you can when buying products or services, and many see insurance as an unavoidable expense. However, buying the cheapest insurance policy may not give you the coverage that your business needs, which can cause a huge loss in the long run. This doesn’t automatically mean you should buy the most expensive policy out there, but you should look for comprehensive coverage in the areas where your business is most at risk.
Look for an insurer with a good reputation
The majority of insurers in the UK are A rated or higher by Standards & Poors, There are however some insurers that carry lower ratings and some unrated altogether. There are also some insurers in the UK that have a fantastic claim service and some that… well, don’t.
When buying insurance through a broker, they might not always place all aspects your insurance through one Insurer, to ensure it remains the most comprehensive and cost effective. It’s worth checking if this will impact future claim payments or create admin issues in the future.
Understand your legal obligations
Whilst business insurance is generally voluntary in the UK, Employers Liability is a legal requirement if you employ any number of staff. We often see a number of UK Businesses with subsidiaries worldwide, and Countries such as America will have varying laws and legal requirements for business owners in each state. For example, for those businesses who have staff based permanently in America, it’ll likely be necessary to arrange local Workers’ Compensation Insurance to comply with state legislation.
Check the terms and conditions.
Nobody likes to read through lengthy terms and conditions. However, it’s important to ensure that it does cover against the risks your business may face so you can rely on it to pay out in the event of a claim. There may be certain requirements that you’ll have to meet to make sure that the policy remains valid, so it’s worth checking these and making sure you understand the T&C’s of the policy.
If in any doubt, speak to a reputable insurance broker and they’ll be happy to talk you through any key points. Most insurance brokers don’t charge a fee for an initial conversation, so it’s worth using this free advice during the early stages of buying insurance.