New year, new start-up: protecting the beginning of your business
THE new year always signals a time of new beginnings and fresh starts.
With the Northern Ireland Statistics & Research Agency (NISRA) stating that the number of new businesses in Northern Ireland is continuing to increase each year, many people will be taking the exciting leap to start their own business in 2019.
Starting a new business requires tireless effort and seemingly endless financial reserves. Along with the necessary tasks required to start a business, including securing start-up costs, establishing a customer base and forecasting cash flow problems, new business owners are often besieged by potential risks.
Therefore, it is important that your new business is properly protected through commercial insurance, particularly in this crucial initial stage. New companies can also vary widely in terms of insurance needs. Many different factors, including industry, location and size, will determine the type of insurance a business needs to survive - and thrive.
One of the most important things for a first-time business owner to obtain is employers’ liability cover. This is a legal requirement for all UK employers and must be acquired for any employees that you hire, whether they are full-time, part-time or ad-hoc workers.
Along with this, business interruption insurance will help new businesses to recoup lost profits if an insured hazard occurs and results in damages to the property, which could, in turn, cause businesses to temporarily close. Property insurance will also protect your commercial premises and content from a broad range of risks.
It is imperative for start-ups to identify what is important to the success of their business in the first year. From this, business insurance can be tailored to match the specific needs of the start-up. When reviewing available insurance covers, new business owners should determine the points where the business is at its most vulnerable – the components their business could not survive without - and to secure insurance that bolsters and protects these. This can include additional covers for insuring stock, for companies that are dependent on products; motor fleet insurance for those who provide a service; or equipment breakdown cover for companies that have no tangible outputs, with computers as their income source.
As much as a business premises is all about location, location, location, for a business to be protected fully, the insurance should be all about detail, detail, detail. All information provided to the insurance broker regarding the new business must be clear and concise, providing all the necessary details to be covered fully, as incomplete details could render it void. Within this, make sure the title of the company is listed correctly for legal trading. Also, check that the accounts and insurance are in the right name and reference all that the business intends to carry out when trading.
As dynamics can change so much in a business’s infancy, it is strongly advised that start-up owners keep in regular contact with their broker or insurer for the first month, and continually throughout the first year of business. Therefore, if there are any changes in the business, the insurance provider is made aware and can advise on how to adapt the cover accordingly.
Starting a business is an exhilarating time; make sure you are properly insured so that you can focus on the day-to-day running and enjoy making your business a success.
:: Diane Johnston is head of SME at Autoline Insurance