Insurance Buying Guide

Purchasing appropriate insurance cover is an essential part of successful business planning. This useful guide will help you to identify the insurance you need and how to buy it. It will also help you to avoid some of the potential pitfalls and outlines the important considerations including the role of your insurance broker.

  1. Why buy business insurance?
  2. When to buy insurance?
  3. What types of cover are available?
  4. What to consider when buying insurance?
  5. How to buy insurance?
  6. What to do after buying insurance?

 

Why buy business insurance?

Running a business is risky. But rather than shoulder all that risk alone, insurance can help manage and control that risk, leaving you to concentrate on making your business a success. Think of insurance as a safety net. Should the unexpected happen, insurance can ensure you stay in business. Whether it is a devastating fire or flood at your premises, or a claim for compensation from an employee or customer, your insurance could pay for the damage and the associated costs, and could even help with any loss of profits.

When to buy insurance?

There are several key events in your company’s life cycle that that can influence your insurance buying decisions.

Owning a business: Owning a business means you have liabilities and assets to protect. Business insurance can help cover your product, your staff, your place of business, and offer liability coverage in the event of legal proceedings.

Merging: When two businesses merge, they combine operations, assets and liabilities. As you and your business partners evaluate your insurance options, keep in mind that savings and efficiencies may be available.

Expanding: As your company evolves, so do your assets and liabilities. All these changes should be reflected in your insurance coverage.

Starting a new business: Being on your own can be exciting and scary all at once. Finding the right coverage to fit your budget and needs doesn't have to be daunting. Many insurers offer services to help businesses start off on the right foot.

New markets: Should you choose to explore overseas opportunities, your insurance can be adapted to ensure that your business, product and your staff are protected.

What types of cover are available?

The type of insurance policy you buy may differ depending on the size and type of business you are running. To help you understand what is on offer we have summarised a few key areas of cover:

Public liability insurance Public Liability Insurance protects you against claims for compensation from people outside your business who have suffered an injury or whose property has been damaged due to or in the course of your business.

Employers' liability insurance If you have employees, even part-time or on a short-term basis, employers' liability insurance is an important consideration. The cover protects you from expensive damage awards and litigation costs should you be sued by your employees for personal injury or damage arising out of their employment. Depending on the type of injury or illness, compensation payments and legal expenses can be very large.

Property and business interruption insurance Could you afford to rebuild your premises or replace all of your business equipment or stock in the event of a fire or theft? If the answer is no you should consider property insurance to protect your business assets and property. Another cover to consider is business interruption insurance. This can make up for the money you lose if you can’t work because your property has been destroyed, stolen or damaged.

Professional indemnity insurance Professionals sell knowledge and expertise to their customers. If your client loses money because of a mistake you’ve made or because your work is late or not up to scratch, you may face a claim. Professional indemnity insurance can protect your business by paying legal costs and compensation.

What to consider when buying insurance?

  • Assess what you most need your policy to cover.
  • Don't waste money on cover you don’t need.
  • Be aware of any exclusions the policy might have.
  • Understand who is covered – you, your employees or customers.
  • Look beyond the price – the cheapest policy may not cover your needs.
  • Answer all the insurer's questions honestly and to the best of your knowledge.
  • Check you are buying a policy from a genuine insurance provider who has a good financial rating and has a good record of paying claims promptly and fairly.
  • Get informed advice from an insurance broker.

How to buy insurance?

Travelers products are mostly available via insurance brokers.

An insurance broker is not biased towards or against any particular provider and will therefore aim to pick the best option for their client. Good brokers will also provide professional advice to businesses and individuals, playing a key role in the identification, measurement, management, control and transfer of risk.

The Broker should:

  • Assess your insurance needs and search for a suitable policy.
  • Present the choice of products available.
  • Explain any professional advice they give to you clearly and honestly.
  • Make sure you understand what is, and is not, covered by your policy.
  • Clearly state the costs of your policy – including any fees they may charge.
  • Give you clear information and prepare documents.
  • Support you in the event of you making a claim.
  • Explain your rights to complain and cancel a policy if you change your mind.

To find a broker near to you, click here

What to do after buying insurance?

Read the terms and conditions of your policy. They should be clear and easy to understand. If after reading your policy in full you think that the product you have purchased may not be the right one for you, or if you have any questions, contact your broker straight away.

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