Insurance is essential when starting a business but the difficulty lies in understanding which policies your start up requires. It goes without saying that insurance policies differ depending on the type of business. There are a number of policies that are common to most start-ups and some that are company specific. The purpose of insurance is to transfer the risk and cover risks that you potentially cannot afford. Starting a business can itself be a massive risk so not having the appropriate insurance is simply not an option for start ups. Understandably many firms see this as an additional expense during a period that brings enough other expenses, and some feel owning good coverage is unnecessary. Insurance can not only save your business but it can also protect your personal financial well being. Yes companies must do all they can to keep costs at a minimum during the early stages, especially in the tough economic climate at present, however insurance is not an area to neglect in any way shape or form.

Various Insurance Policies:
Business liability insurance is arguably the most important type of insurance a business can have. It can not only protect you against claims or loss but also your customers and clients against any damages that could potentially occur. This includes employer’s liability, public liability and general liability. Perhaps in the case of start up businesses employer’s liability may refer to the sole trader only as there may not be any further involved individuals but a company is legally obliged to have employer’s liability. Again depending on the company in question they may need property insurance if they have a property from which they operate and they may need motor insurance if company cars are in use. Professional indemnity insurance is needed for certain types of businesses such as accounting or law firms. Some other types of insurance policies include equipment insurance, health insurance for employees, credit insurance, travel insurance, and legal expenses insurance. The type of policy needed will depend on whether products or services are being provided as well as many other factors but companies must ensure they have all relevant policies in place before the commencement of any business activities.

Research is Key:
As with any purchase researching insurance is very important. Prior to conducting this research it is recommended that you are fully aware of all policies required. You should shop around for the most favourable quotes online. Many insurance companies now have a facility which allows you get a rough estimate on the premium you should expect to be paying on a certain policy. Another suggestion is to go through an insurance agent or broker. Aon , Willis , and Marsh, are three of the leading brokers in Ireland however there are many smaller brokers also available. Don’t be afraid to ask questions at the end of the day it’s your business so the more you know the more confident you will feel. Conducting research also involves reading through the various policies in detail to ensure you are fully aware of what is covered and what is not. For example one may assume that property damage insurance covers all possible damage however it may state somewhere in the policy that this excludes flood damage or some other area which may lead to damage. Another important point is to check the policy excess. In a sense this is the amount it costs to make a claim and therefore comes off any payment from the insurer. With this the volume of claims would increase significantly and thus so would the cost of insurance. It is essential that any start up business is aware of the policy excess on each policy.

Selecting the Company:
Compare the benefits each company has to offer. A company offering the most favourable deal in terms of cost does not automatically mean this is the company that should be chosen. Shopping around is key and having different policies with different companies may also be an option worth considering. Once again I feel I must stress that insurance is not an area which can be overlooked during the early stages of business formulation. Going into business is a risk in itself; don’t risk it all by not having the correct insurance policies.

Business Insurance: Your 6 point plan to get covered!

Managing Director of Burke Insurances Ltd and owner of www.publicliability.ie and www.piinsurance.ie, Sean Burke has been working as an insurance broker for nearly 30 years. He is accredited by the CII (Chartered Institute of Ireland) and is a Chartered Insurance Broker. The firm is a member of the IBA.

Many would say that when contemplating setting up a new business, the last thing you want to be thinking about is insurance! But the good thing about insurance is that once you have the right cover in place and you are working with people you trust, you can have some peace of mind!

Typically, the six main insurances purchased by start up business, apart from the obvious motor insurance, would be:

1.Property Insurance:
To protect the buildings, equipment and stock of the business against the likes of fire, storm, flood, burst pipes, explosion or theft, amongst other risks.

2.Business Interruption Insurance:
This effectively is insurance to replace the loss in income your business would suffer following a fire, flood etc at your premises.

3.Employers Liability:
This is an insurance which protects you (the employer) should an employee bring a case against you for being injured in the course of their employment by you.

4.Public Liability:
This is an insurance which protect you should a member of the public bring a claim against you for being injured as a result of your negligence. A claim can be brought against you whether you operate at or away from your premise. Over the last few months, we’ve launched our new website www.publicliability.ie where public liability insurance can be purchased in a matter of minutes. Based on the excellent response we have been getting to the website, it’s evident that this type of insurance is a priority in the business start up plan.

5.Products Liability:
This insurance is usually purchased along with public liability insurance. If you make, alter, repair or supply products to the public, there is a danger that the products themselves may cause injury or damage to the public. You have a duty under common law and under statute to ensure that someone is not injured as a result of the use /consumption of your product.

6.Professional Indemnity or Professional Negligence:
If your business involves advice for a fee, then you need this type of insurance. Everyone owes a duty of care to show reasonable attention and skill when they are engaged to provide a service to someone. If someone fails to exercise this duty (i.e. is negligent) they may be liable for losses incurred by their client, and/or third parties. It’s a very detailed and occupation specific area of insurance but once you are fully aware of how it works, all questions are answered. We’ve tried our best to explain this type of insurance as simply as possible – on both our homepage www.burkeins.ie and our Professional Indemnity website www.piinsurance.ie.

The information above is just a brief summary of insurance covers and does not take into consideration terms and conditions that may be in place. But don’t be worried or become bogged down in detail – helping you through the maze of terms and conditions is what we are good at.

For more information on the insurances mentioned above, feel free to visit our websites – www.burkeins.ie / www.publicliability.ie / www.piinsurance.ie. We have been advising on business insurance for forty five years plus and we’ve worked with more start up companies and clients than we can remember so we know what we’re talking about! Make sure to check out our Youtube Channel as we are constantly updating our videos to make insurance that little bit easier – http://www.youtube.com/user/BurkeInsurances

Having the right level of Insurance in place is critical for your new business. For the same reason that you would not drive your new car without insurance, do not open any business without insurance in place – Mr. Murphy’s law could be just around the corner. Most of the below insurance is more relevant to retail type businesses but employees are more and more aware of their rights and the courts are very intolerant of any business that have not followed the correct procedures when hiring, firing etc. With people ever more protective of their jobs and employers under more pressure to cut overheads (Read: people) the liklihood that you will find yourself being sued is on the increase.

Types of Insurance

Employers Liability Insurance

Employers Liability Insurance protects your business from claims made by staff who have suffered injury or illness at work through the fault of your business.

Public Liability Insurance

Public liability insurance protects your business from claims made by customers who suffer injury on your premises.

For example, a customer is likely to claim compensation if he / she suffered injury by slipping on a wet floor, tripping on a discarded box etc

Public Liability Insurance covers the total cost of such claims including the associated legal expenses.

Stock Protection

Most retail businesses will have a significant level of stock on the premises you should arrange cover for your stock to protect it against fire, flood and theft etc.

Contents & fittings Insurance

It is important to cover your contents, fixtures & fittings such as counters, shelving etc.

Money & Cash Cover

Money & Cash at your premises can be insured againts break ins and money being robbed in transit to the bank. The limits available depend on your security arrangements, type of business etc

Buildings

If you own the premises that you operate from you can include cover for the premises and also,

‘All Risks’ on specified items
Cover for specified items for loss or damage away from your business premise

Business Interruption
Covers the loss of profits from your business, arising from insured events.

For example, if you were unable to trade because of a major fire at your premises, business interruption insurance could pay for your lost earnings and costs during the period of interruption.