Sorting the right cover for a business can be daunting. In fact, a recent study by NEXT Insurance, discovered that 53% of SME owners are unsure about what policies and coverage their business needs.
With this in mind, Bionic’s Insurance Director – James Barwell – has supplied his 5 top tips for avoiding a business insurance nightmare: “Having the correct policies in place protects businesses against unexpected risks but the first obstacle for many owners is understanding which types of insurance they actually need for their company. The only two types which are a legal requirement are employers liability insurance – if you have one or more employees who aren’t family members and business motor insurance – if you use a vehicle for business purposes.
While other types of insurance aren’t a legal requirement, some are essential. I strongly advise any small business with a brick and mortar shop to take out public liability insurance which covers your back in case a customer injures themselves on your property. Here are some of the most common mistakes I see small business owners falling into when choosing their cover:
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Not assessing business risk properly – “Risk assessments are a legal requirement and you need to know the scope of risks across your business both for insurance purposes and public health and safety. If you don’t know the scope of the risks, you risk being underinsured. Even worse, if a claim is made against you, you might not be protected because you don’t have the right cover. It’s key you declare the correct details to your insurer broker to avoid issues down the line.”
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Choosing cover only based on price – “Every business is unique — down to trade, number of employees, building and location. That’s why you need to go through a number of questions with a broker to ensure you’re properly insured and when it comes to cover, price isn’t the only thing you should consider.”
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Not checking documentation – “No one likes to read the fine print on documents but it’s important to check everything you’ve stated and your policy is correct. Your broker should send you a ‘Statement of Fact’ document, which includes everything you have stated including claims history, company details and details of the cover. If you spot something is incorrect — tell your broker immediately. Remember, if your business details aren’t correct and you need to claim — you risk your policy being void.
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Ignoring the reputation of insurance providers – “Before agreeing to a contract with a provider it’s imperative to check their reputation. You can check business insurance reviews on sites like Feefo, and Trustpilot but also industry-specific platforms like Defaqto. If you’ve never heard of a provider, speak to your broker to learn more about them.”
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Reviewing a business insurance without a broker – “Brokers are knowledgeable and know many different insurers and which questions to ask to ensure you get an accurate quote. When it comes to renewing your policies, a broker can assess your business needs and advise you on whether to stay with your current broker or switch. You should review your insurance cover with your broker at least once a year to check it still meets your needs. But you also should review your cover if you’ve moved premises, brought on new suppliers and partners or started a new product or service.”