10/01/2014

Starting Your Own Business: What Commercial Insurance Can’t You Do Without?

Commercial insurance can seem like a complex subject, but it’s one you need to engage with if you’re starting a business. So, what do you need and what can you live without?

Where there is risk, there is a reason for insurance. It’s the case with your home, your car and your health, and the same principle extends to your business. The problem is, commercial insurance is extremely varied in nature and it’s not always immediately obvious what you need.

It might help to break things down a little. There’s insurance you have to purchase – either because it’s a legal requirement, or a professional requirement, or because it’s just not smart not to have any. Beyond that, you can broadly think of commercial insurance in two categories: property, and liability. There are other forms, and endless niche variations, but this is a good starting point.

Property

Commercial insurance for property covers physical things. If you have any of these as a part of your business (rather than things you owned anyway), you should seriously consider insuring them. Plus, if you owned them before you started your business but now use them more, or in a different way, then you should investigate whether you need to change your cover: many insurers won’t accept a claim if loss or damage occurred during the course of your work when they were on a domestic policy. This is only fair, since the commercial policy reflects the higher level of risk that comes with business use.

This kind of commercial insurance covers buildings and contents. If you work at home you may think that you don’t need to change your policy. Think again: working at home often brings new risks with it. Even if you don’t have any expensive stock or equipment on the premises, you might be seeing clients at home, or employees might be working there too. The more people come to your house, the greater the risk of theft or damage. An insurer will want to know about this. (Additionally, you may want various kinds of liability insurance for your home, too.)

Beyond that, you might need extra vehicle insurance, and cover for goods in transit. If you keep large amounts of money around, you may want cash insurance too.

Liability

Other than property, you will want to protect yourself against lawsuits that arise from the many different forms of claim that people might bring against you. Remember, these don’t have to be justified: you will still have to pay legal expenses if the claim isn’t upheld, and without the right kinds of commercial insurance you would have to meet these costs yourself.

Public liability insurance covers you for any harm or damage incurred by a member of the public in the course of your work, whether at your place of work itself (home or offices) or when you are out and about. Employers’ liability insurance broadly does the same for members of staff, and can apply to harassment and unfair employment practices as well as accident and injury.

Depending on the nature of your business, you might also need to consider professional indemnity insurance (which relates to your judgement and the advice you give in your work); errors and omissions insurance (which applies to your products and services); and directors and officers insurance (which covers you for mistakes made in a managerial capacity).

There is often some overlap in the different commercial insurance policies, so it is important to make sure that you are covered adequately but not paying for more than you need. A specialist broker will be able to advise you on the right collection of policies for your business, and may be able to offer you a combined policy that brings them together under one umbrella policy and one monthly payment.

This article was supplied by the leading firm of Irish insurance brokers, Robertson Low, established in 1995 are regulated by the Central Bank of Ireland as a Multi Agency Intermediary and the only Irish incorporated ‘Lloyd’s broker’.