Insurance tips – A guide to keeping your business safe

Running a small business is hard work and time is precious, with a long list of jobs to do insurance is likely to feature towards the bottom. However with the FCA reporting that almost 40% of SME businesses are underinsured having the right cover in place can be key to keeping your business safe and thriving. If you own a small or medium-sized enterprise you need access to insurance products that protect your business if things go wrong.

Not purchasing insurance puts your business at risk but not purchasing the right amount of insurance also poses a risk to your business.

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What is under-insurance?

For example, your contents value is £50,000 but in order to keep the premium lower you advise your insurer that it is only £25,000 leaving you 50% underinsured. You suffer a fire causing £5,000 of damage to contents and make a claim to insurers. Insurers only pay you £2,500 even though your sum insured is £25,000.

This is because of the average clause is calculated as follows;

Would your business survive the shortfall? If you are unsure what limits are adequate for your business take the time to discuss it with your broker or insurer. Getting it right will be essential to the survival of your business should the worse happen.

Tips to reduce risks

Under-insurance aside, there are things you can do to reduce the risk your business faces on a daily basis, here are some of the basics that can help;

• Reduce the risk of fire by removing any rubbish /combustible materials daily
• Minimise the possibility of theft through regular security checks such as checking windows and doors are secure
• Check your cover and sums insured regularly, if your business grows your limits should grow with it to avoid the issue of underinsurance discussed above
• Use online tools for advice such as the HSE: Information about Health & Safety at work
• Back up computers, laptops and store in a  secure location away from the premises so you don’t lose important client information
• Always read contracts before signing and if you don’t understand something get legal advice

Tips in the event of a claim

No matter how cautious you are, unfortunately claims do still happen, here are some tips to help if the worst should occur;

• Act promptly and report claims immediately to your broker or insurer
• Take as many photographs of the damage as possible this will help insurers verify your claim
• Secure the building or site, using local contractors, to prevent further damage or loss and record all costs and expenses incurred keeping receipts to submit to insurers as part of your claim
• Remove undamaged goods to prevent contamination
• Documentation is essential  so keep copies of everything relating to the loss, keep copies of invoices and any other information you will need to submit a claim

Prevention is always better than cure and we would always recommend avoiding risk when possible.  Don’t cut corners and think it will never happen to you, insurance provides peace of mind that your business will recover from a loss therefore it’s important to get it right.

Caunce O’Hara is a business insurance broker offering protection to freelancers, contractors and small businesses. Insurance is vital to all businesses, especially to start-ups. If you would like a competitive online quotation for your business insurance, please click the green button, it only take a few minutes.

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