Seeing that any small business owner should be aware start up costs will always be a significant factor and particularly after a small business initially begins trading you will need to control costs efficiently and ensure that the company receives value for all funds invested.
It is against this background that lots of small business owners disregard insurance just as one avoidable cost and a economic burden to a small company. This is usually economic folly and in a number of cases actually illegal.
For the majority of small businesses the price of an suitable insurance policy cover is really relatively rather insignificant and offers such a considerable amount of safeguard for the business that the business proprietor should be in fact well advised to adopt the protection.
The types of cover which are required for the small business very much depends upon the business activities or trade of the company or individual and the evaluation of this can be undertaken by the company owner or else frequently, and more advisably, an insurance adviser ideally a professional insurance broker.
Specialist commercial insurance agents are comparatively simple to find seeing that they are extensively available across the web. Many offer on-line quotation services for a variety of standard products however the specialist business insurance adviser will offer an advisory service from which you will be able to get independent cover advice that is matched to your business.
As mentioned earlier there are a few commercial insurances which are in fact mandatory being required by law.
Firstly, there is obviously, motor insurance in respect of any motor vehicle that may be owned or operated by the business. At the same time as this may be a statement of the obvious, it is of course important to include this as the cost of the cover must be a part of commercial budgets.
Secondly, all businesses that employ people in the United Kingdom are required by law to carry an employers liability insurance policy. This protects the insured against claims from employees in respect personal injury or property damage sustained in the line of their employment. Similar legal requirements exist in other places including the USA where workers compensation is usually a state requirement in all states.
In the United Kingdom the lawfully mandatory minimum level of insurance is five million pounds although in practice insurers issue insurance policies with a minimum limit of 10 million pounds.
In order that the new business can make an assessment of what insurances are appropriate and which of them are being bought you should understand the actual nature of what insurance actually is. This may seem obvious but many individuals don’t actually have a practical knowledge of what insurance is.
Insurance is at its most simple a risk transfer means. Accepting that businesses confront risks on a daily basis, and these may be threats to property owned through the businesses, claims of negligence against the company by third parties or claims from workers the company operator can decide to face these risks to their business, except for wherever such insurance is a legal necessity, and not cover in respect of these risks.
The more wise company operator will pinpoint these risks, perhaps with the assistance of an insurance adviser, and decide to transfer these risks to a business that specialises in accepting these risks i.e. an insurance company.
Thus by payment of your premium the risk is transferred to the insurance company who, at least theoretically, is much better prepared to face these risks.
So with an understanding of the basic background of insurance and its purpose, you should set about the process of identifying the hazards that your own company faces and deciding whether you are prepared to carry those risks or whether or not you prefer to purchase an appropriate insurance.
Then decide whether you would like to undertake this process yourself of whether or not to engage the services of an insurance professional that might prove to be the more competitive option.
Blackfriars Group is a specialist commercial insurance broker providing instant access to a wide range of commercial insurance services for a wide variety of businesses and offering first class services in new start business insurance.
