Starting any business involves risks of one kind or another, and where there are risks there is the need for insurance. In some cases, you might be able to manage the potential liabilities yourself, but in others, insurance is either a legal requirement or the only economical alternative. A good commercial insurance quote will enable you to ‘externalise’ these risks by moving them onto a third party, namely the insurer. The question is, what do you need to include in your policy?
Nowadays, insurers often have template policies that they use for new companies. These are tailored to the business’s specific requirements. There are several reasons why your commercial insurance quote should be lower as a result, including economies of scale and smaller administrative costs. However, you still need to choose which elements to include, and what level of cover you need. Consider some or all of the following:
- Employers liability cover. This is generally a legal requirement for all businesses that have any employees.
- Public liability insurance. This protects you from the effects of a lawsuit by a member of the public that arises due to loss, harm or damage in the course of your work.
- Errors and omissions insurance (E&O) is a bit like public liability insurance, but covers you for harms that arise specifically from your products or services.
- Professional indemnity cover. Once again, this is a little like E&O, but is applicable when your business involves providing advice as part of its services. Solicitors, mortgage brokers, financial advisers and architects will need this by law, amongst other professions.
- Directors and officers liability (D&O). This protects you from the financial impact of lawsuits arising from the decisions made by you or other managers of the company. These can include harassment and discrimination. D&O will usually be required before you form a board of directors or secure outside investment.
These all protect you from various liabilities – namely lawsuits brought by different parties. Make sure your commercial insurance quote includes legal fees as well as any settlements required by the court, since even if the case goes in your favour these can be prohibitively expensive.
Beyond these, you may need to insure property, stock, vehicles, cash and so on, whether on or off the premises (if your work involves transporting expensive stock or large quantities of money, you should consider goods in transit and cash in transit cover).
Finally, think about the different forms of personal insurance you might want to take out. Regular employees often receive insurance as part of their pay package, as a “˜taxable perk’. As someone self-employed, you will not. All the same, illness or injury could mean the end of your business and livelihood, especially in the early days of your company when you are so key to its success. Health insurance and critical illness cover could be two to purchase and, of course, life insurance will ensure that your family is provided for in the worst case scenario.
Many or all of these can be bundled together under a single policy, making for a more competitive commercial insurance quote. However, make sure you take specialist advice to establish that you really do have all the cover you need.
About the Author: This article was supplied by the leading firm of Irish insurance brokers and members of the Irish Brokers Association, Robertson Low, established in 1995 and the only Irish incorporated ‘Lloyd’s broker’.