Insurance cover for growing businesses - what do you need?
When you first launched your business, it’s fair to say that your goal was to be a success. Continued growth, however, brings with it a set of challenges and a new environment where insurance plays a big part in reducing and managing your exposure to financial risk or risk of injuring other people or their property.
Insurances that were fine when you were just starting out in business may no longer be sufficient to reduce or manage your risks. In fact, not having the correct insurance, or indeed being underinsured, can leave your business open to litigation or worse, being financially crippled.
That’s not to take away from the success that you have well and truly earned over the years, and the correct insurance will provide you with financial security and protect your business. So, what type of insurance do you need for your growing business?
Professional Indemnity Insurance
With the growth of your business, you might find that you are gradually providing more and more advice to your customers including about the products you sell. For some businesses, however, their mainstay is actually providing professional advice, for example accountants, lawyers and engineers, and they would already have Professional Indemnity Insurance. For others, who provide casual advice to customers, insufficient insurance cover can leave them wide open to litigation and substantial legal costs. This is particularly relevant as your business grows because you might not be aware that providing advice to customers can create the need for additional insurance cover or your existing policy to be upgraded.
Business Interruption Insurance
As your business grows you should consider buying this policy, if you don’t already have the cover. This insurance is important as it will pay ongoing wages of key staff, overheads including finance costs and fixed overheads. Many insurers pay these claims monthly, so you can pay bills and keep the business open, while you get back on your feet. This is a policy that many business owners overlook when buying insurance cover for the start of the business. So as you update the insurances that cover the replacement cost of stock and equipment (i.e. in the case of a fire), you should relook at Business Interruption insurance.
Without business interruption insurance many businesses fail to reopen after a large fire or storm claim.
As your business grows, so does your reliance on emails, databases, websites and so on. Unfortunately, this reliance plays into the hands of cyber criminals who increasingly target businesses using viruses, ransomware and DoS (Denial of Service) attacks. Many growing businesses (including your key service providers) are extremely vulnerable to these attacks. Whilst you can put internal measures in place to reduce losses or minimise their occurrence, cyber hackers are often one step ahead. Cyber Insurance will help you to recover from these attacks, including rebuilding databases and removing infected software, as well as replacing lost income and minimising the impact to your reputation.
You might purchase additional assets for your company as your business grows. This could include machinery, plant & equipment or an office/ warehouse. This is a sound business strategy, however, when you become the owner of a property, you also need the right type of insurances to meet the requirements of your bank and reduce your financial risks. For example, as a property owner you will likely be responsible for the roof, as well as damage to the building caused by storms, floods or vandals. The costs of repairs for this type of damage can be substantial and Property Insurance can help to reduce your risks.
We applaud your efforts in building a successful business and recommend that you take the time to add insurance as part of your regular business strategy reviews. For help deciding what type of insurance policies are suitable for your growing business, talk to an insurance specialist today and find your local adviser.