StartupCafe

As a startup you have a million things to think about, and unless you’re offering bungee jumping or fire eating lessons, insurance is probably not top of the list. As much as we love a living-on-the-edge lifestyle, we thought it might be helpful to get the scoop on insurance and hear what’s relevant – and not relevant – to rock ‘n roll startup life. Thanks very much to Emma Jowett, resident writer at Policy Expert, for putting this together in response to all our questions! We tried to sing this to the tune of “12 Days of Christmas” but alas… you’re better off reading it here. We hope it helps!

1. Kitchen table kick off
2. The wheel deal
3. Look after number 1
4. Connect and Protect
5. What could go wrong?
6. Well hello clients!
7. Team building
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1. Kitchen table kick off

Many start-ups have humble beginnings – a spare room, a kitchen table or even a shed in the back garden. If your start-up is home-based, it’s probably a fairly small operation at this stage and insuring your business will probably be the last thing on your ‘to-do’ list. However, it could be worth checking your situation with your home insurance provider, as most standard home policies will not automatically cover you if you’re using your property for business purposes.

You may be working from a desk in your bedroom, but you might still have expensive equipment – such as a laptop, I-pad, printer or fax machine. This equipment is probably essential to your daily work.  To financially protect all these assets, you could need some additional cover.  You may also want to look into business insurance too, as this could help cover costs if your work was disrupted due to damaged or stolen equipment.

2. The wheel deal

Depending on the type of business you undertake, your start-up might need a vehicle. This could be to visit customers/clients or transport goods from A to B.  As with your home cover, a standard car insurance policy will probably not cover your vehicle if it’s being used as part of your business.  If you chat to your car insurance provider, they’ll be able to advise you on how to get your car fully covered for business use. There are also specialist van insurance policies that cover business usage.

3. Look after number 1

When you decide to set up your own business, you’ll obviously be a key player in the progression and success of that business. In fact, it’s quite possible you’ll be the only player. Not to be too doom and gloom about it, but if anything happened to you that prevented you from working – would you be okay financially? If you’ve set up your own company, you won’t be covered by statutory sick pay.

As the owner of a start-up, personal accident cover might be worth checking out. It could pay you a lump sum and/or weekly benefits if you were unable to work through injury.

4. Connect and protect

Internet start-ups are particularly prevalent and seemingly successful at the moment. If your business is online, you may require some very specific cover for certain elements.

Unfortunately, cyber crime is becoming increasingly common. If you rely heavily on online systems, specialist business insurance is available to cover you for a number of online risks. This could involve your own cyber liability (i.e. if you do something naughty online) such as breaching copyright or unwittingly transmitting a virus to a client’s systems.  Some policies can also cover cyber attacks against you, such as virus damage or a hacker attack on data.

You’ll need to weigh up the potential damage cyber issues could cause you to see if it warrants some financial protection. You may feel you could handle the financial implications of your site going down for a week – as this is quite a measurable cost. The cost of a claim against you for a data leak or copyright infringement is not so easily predicted.

5. What could go wrong?

Now, it’s obviously not pleasant to think about things going wrong when you’ve only just started, but it could save you some heartache in the long-run. Not all the business insurance out there will be applicable to your business. For example, if you run a flower delivery service you probably won’t need cyber protection. If your work doesn’t deal with the public in any way – it’s highly unlikely you’ll need liability cover in case you injure someone.

If you offer any professional service – such as consultancy advice, design or financial planning, it could be worth thinking about professional indemnity cover. This covers you if your business has a negligence claim made against it. Whether it’s a confidential email sent in error, a piece of flawed consultancy advice or a missed critical deadline – this insurance can help meet the cost of a claim.

Even if you’re a goody two-shoes who never makes a mistake, you could fall victim to a spurious claim. In this instance, professional indemnity cover could meet the expenses incurred in defending yourself.

6. Well hello clients!

If all goes well, you should start acquiring clients or customers fairly quickly. If clients visit your office (even if this is your home) or your work deals directly with the public – you may need to think about public liability insurance. This could help you meet the cost of a compensation claim if someone was injured due to your work. Depending on the type of work you do, some potential clients may request proof of public liability before agreeing to work with you.

7. Team building

As business booms (hopefully) it’s likely that your workforce will grow too. If you run a business singlehandedly, you’ve no reason to even think about employers’ liability insurance. As soon as you take on just 1 member of staff – this cover then becomes a legal requirement. There are some exceptions to this legal obligation and these can be found on the HSE website. Employers’ liability could help you meet compensation claims if any of your employees became ill or were injured because of their job.

By Emma Jowett, resident writer at Policy Expert

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What do you think? Any experiences with insurance you care to share, or anything insurance-y that troubles you? Here’s your chance to ask!