Sorting out the right insurances for your business is one of the many things you have to put on your to do list and gradually tick off if you want to grow into a proper grown up business. And this is one of the things which my business advice clients ask about regularly, as it’s something that people often neglect when they’re starting out and want to get sorted out as their business grows.
Public liability insurance
You’ll need this if people (customers, suppliers) come into your office – including if you work from a home office. If you work entirely virtually, or you see clients in coffee shops or a co-working space, you probably won’t need this one, but if you have people coming to see you or you go to your client’s office, public liability insurance covers you if a client slips on a rug on the stairs, or if you spill your fizzy drink over a client’s computer.
Remember that you have a duty of care, so you can’t expect your insurance to pay out if clients are bitten when wading through a pool of alligators to get to your office, or climb up a dangerous ladder to your attic office.
Triggers for getting public liability
You might move into new premises, and think about your insurances then. You might get a new contract which requires you to have the insurance in place. Or you might just be having a clean sweep of all your documentation and making sure that you have everything in place, maybe because you’re thinking of selling the business and you want everything tidied up before starting on your exit.
When you might regret not ticking this off your list
One of my clients had a woman trip on the pavement outside, fall through the door of her shop, and then hit her head on the windowsill. My client hadn’t done anything wrong, but had weeks of stress because the woman who fell decided to sue her and my client had to deal with lawyers letters and demands for hundreds of thousands of pounds. She had public liability insurance in place, but imagine how much more stressful this would have been if she hadn’t been covered. Although it might seem very unlikely that someone would sue your little business, for the sake of an annual fee, it’s better to be covered.
Where to get it
Sometimes you can get public liability through a trade association, and the savings on your public liability insurance cover the cost of your membership. This is a great option, or if you don’t have a recognised trade body, try one of the business oriented comparison sites such as Simply Business.
Professional Indemnity Insurance
This is often confused with public liability, but professional indemnity insurance covers you if your client thinks that you made a mistake and gave them the wrong advice or messed something up for you. If you repair computers, or design websites or do massage therapy, you need professional indemnity insurance. I’ve had a policy for years, and it costs me just £19 per month, and it’s reassuring to have it in place just in case someone thought that I’d suggested the wrong thing.
Triggers for professional indemnity insurance
People often get this if they are getting bigger, and doing bigger contracts. It’s often a requirement of working as an associate for another company, and is pretty much always required if you want to do any work which is funded by the government, such as my work under the Growth Accelerator programme. You’ll need it right from the start if you’re a lawyer, under the Law Society rules.
Where to get it
Cavendish Munro have a good policy for small businesses, or you can use one of the comparison shopping sites.