A guide to getting the right insurance for your business

Why is it important to get the right insurance?

So, you know you need insurance for your business but how do you go about getting the right cover? It’s not enough to simply purchase the first policy you find. There are two main benefits for making sure your insurance is tailored to the unique needs of your business and that you have the right coverage in place:

1. Claims - Having the right insurance and limits will result in a very high likelihood any claim will be successful should you need to make one. Did you know? Having the incorrect type of insurance cover is the number one reason a claim may be unsuccessful.
2. Costs – You should only be paying for insurance cover that you actually need. Purchasing unnecessary types of insurance covers or choosing higher limits than your business needs will mean you’re paying more than you need to for your insurance.

In this guide, our business insurance partner Superscript outlines some key considerations when purchasing insurance for your business.

Decide when to take out insurance (earlier is the safest option)

Your business could be exposed to risk (and therefore could be liable) even before you start taking on work, so you should be considering insurance at the start of your business journey. For example, if you’ve purchased equipment, such as laptops, you may want to buy cover before you start trading officially.

When should my insurance cover start?

There is some flexibility in how you can set the start date for your insurance. If you know you’ll need cover soon you can buy your policy now and set a date in the future for your cover to start.

On the other hand, in some cases cover purchased now can be retroactive. This means even if you’ve been trading for a while without adequate insurance, you may be able to purchase cover that provides protection for any claims against you that relate to a period before you had the insurance in place.

For example, professional indemnity can in some instances be purchased in this way. This would cover you for claims related to things like copyright infringement, flawed reporting or loss of data which may take a number of weeks or months to be recognised.

Pay attention to covers and limits

Business insurance is made up of many different types of covers for specific risks you’re protecting your business against. Some types of insurance cover are broad and apply to most businesses, such as public liability, which covers claims made against your business due to injury or property damage inflicted on a non-employee. Whilst other types of insurance are more specific, such as shop front cover which would only be applicable to those businesses that have shop premises.

Do your research and know what your business needs
To avoid overpaying on your insurance, make sure you only select types of insurance covers that apply to your. Similarly, if you don’t include relevant types of insurance cover, this may leave you open to being underinsured in the event of a claim.

Choose the correct limit
Choosing the correct limit is another way to make sure your business isn’t over or underinsured. Once you’ve decided on the insurance you need you may also need to consider what limits of cover you require. Limits are the maximum amount your policy will pay out in the event of a claim.

In some instances industry bodies or associations will require certain limits of liability for you to work with them. For example solicitors are required by the Solicitors Regulation Authority (SRA) to have a minimum of £2 million of professional indemnity cover in place.

Choose your excess

You should also consider the excess you’re willing to pay. Excess is the amount you will pay towards making a claim, generally if you choose a higher excess you may pay a lower premium.

Whilst some insurers bundle up their covers, Superscript’s flexible business insurance allows businesses to tailor quotes to provide a policy.

Research your chosen insurer

When choosing an insurer, there are a few things to consider. Some relate to determining how reliable and trustworthy that insurer is, while others will relate to your specific needs as a business owner.

Here’s what to consider when choosing an insurer:

• Reviews - as with any purchase, reading reviews from customers whose business needs are similar to your own is a helpful way to assess the strengths and weaknesses of an insurer.
• Regulation - insurance brokers in the UK are regulated by the Financial Conduct Authority (FCA) and you should be able to find evidence of this on an insurers site. The financial strength of an insurer will also give an indication of their ability to pay claims.
• Contact and support - it may be useful to understand how you can contact your insurer, particularly if you’d like the ability to speak with someone directly as some only offer online options.
• Products and terms & conditions - as outlined in this guide, some insurers will bundle up policies while others offer more tailored cover. It’s also important to understand any fees that may be applied if you take certain actions, such as cancelling early. Superscript offers businesses customisable cover by monthly subscription, so you can change, pause or cancel your insurance as needed without fees.

Provide accurate information about your business

Make sure you provide the correct details when setting up your policy to help ensure your insurance cover is relevant and can be relied upon in the event of a claim. To complete a quote for insurance you’ll typically need the following information to hand:

• Your business type - are you a sole trader, limited company or partnership?
• What your business does - what industry do you work in, what type of work do you carry out?
• Your business turnover - how much money do you expect to receive for your work over a 12 month period?
• Where your business operates - does your work cover the UK only or will you be serving other territories too?
• Your employees - if you have any, you’ll most likely be asked how many
• Whether you have cover in place currently - and if you do, your renewal date if you know it

Depending on what your business does, there may be some other information required to get the right cover for your needs.

Update your cover regularly

To help make sure your insurance remains valid and you’re not overpaying, it’s important to review and update your insurance cover regularly. If your business undergoes changes like expanding the number of premises that it operates from, adds new employees or launches into new markets, this may impact your insurance and could leave you underinsured if not reflected in your existing policy. 

Checking your cover regularly and updating if required is a good habit and needn’t take long. With Superscript there are no fees for making changes and purchasing via a monthly subscription allows you to adapt your policy as your business grows.

The Cashplus Business Bank account comes with some very helpful features such as receipt capture, spending insights and also integrates with most leading accountancy software. Find out more about the Cashplus Business Bank account, where you can apply for an account in minutes and get an instant online decision.

This content was created on 10th May 2022

Please note, the content in this article has been provided by a 3rd party and is not guidance from Cashplus. Cashplus Bank make no representations or warranties of any kind, explicit or implied with respect to the contents of this article. Without limitation, Cashplus Bank specifically excludes and disclaims all express or implied warranties and conditions to the extent permitted by law, and any action taken using such content is strictly at the user’s risk.