How to Choose the Right Policy for Your Small Business

If you’re thinking about setting up a small business, then you will have a hundred-and-one things to get organised. Where will you have your premises? What sort of marketing will you use? How will you attract customers? How will you set your prices? What are your competitors doing that you could copy or avoid?

All of these practical considerations that concern the setting up of a new business are more than enough to keep you occupied for days or weeks at a time, as will actually getting down to some hard work getting your business off the ground. Yet there is one thing that really must go on your ‘to do – urgently’ list: getting the right small business insurance in place.

Getting adequate business insurance that suits your business is vital and must be done as early as possible. Even if you haven’t made any profit yet, there is always the possibility that something may happen that will ultimately stop your business in its tracks. If you’re a new business then there may be factors about your premises or about the way in which you carry out your work that you haven’t quite perfected yet, and whilst lack of experience is quite all right in most respects it could leave you open to a claim for compensation.

Let’s say you’re an artist who has just bought a studio to display your art for customers to view and buy. If you’re unfamiliar with health and safety regulations, being a brand new business, you might be unaware of safety measures that a more experienced business would normally have in place – things like wiring safely taped down or low doorframes clearly marked. If a customer enters your premises and trips or bangs their head, they’re not going to care that you’re just starting out and didn’t realise that you needed to do x, y or z – they may feel that they are entitled to compensation and make a claim accordingly.

Or let’s say your best friend has agreed to help you out in the early weeks of starting up the business. He carries boxes and helps you move into your new premises, and perhaps does the odd bit of paperwork for you or helps to serve the customers. If he injured his back whilst carrying out duties for you, then even if his only payment has been dinner every night or the odd pint of beer, he could be classed as an employee who would be able to claim for compensation for his injury.

Or how about if you do bookkeeping for your clients and make an error that means that your client hasn’t paid the right amount of tax and is left with a fine to pay?

These scenarios demonstrate the need to have adequate business insurance in place. Public Liability Insurance (which protects you against claims made by the public with whom you come into contact, either in your own premises or in theirs), Employers’ Liability Insurance (which protects you against claims made by employees for injury or loss/damage to property, and which is also a legal requirement if you have any employees) and Professional Indemnity Insurance (which protects against negligent or mistaken professional advice and service) are all vital elements to keep your business afloat if a claim is made against you.

Consider the type of business you own and the level of cover you’re likely to need and make sure that putting it in place is one of the first things you do in your new business.

AXA business insurance is for self-employed people and small businesses. Save 10% with a professional indemnity, public or employers’ liability quote today. All your small business insurance needs covered.