Which insurances are optional?

There are other categories of insurance, which are optional. So, a decision as to whether or not you need the cover will depend on the nature of your business and an assessment of the risks.

Public liability insurance

This is not compulsory and it covers claims for damages to third parties.

Property insurance

You can limit cover to specific risks such as fire and flood or providing more general cover. You need to consider the level of cover you would need for the equipment and stock too. If you rent your premises, then you should check that the landlord has the appropriate cover.

Theft insurance

If you do not have expensive items of equipment in your business you might decide not to have this one at least initially. If you decide to provide cover for theft, then a reasonable minimum level of security will be required by the insurer.

Professional indemnity insurance

This insurance is only necessary if you give advice which could make you liable. It protects against any loss suffered by your customers as a result of negligent advice. In professions, such as law, accountancy and finances it is compulsory. However, it is common in other sectors such as computer consultancy and publishing.

Business interruption insurance

This insurance provides compensation for lost profits and extra costs if your business is disrupted due to say a fire. It is also referred to as ‘consequential loss’ insurance.

Key man insurance

A small business is often dependent on key members of staff. How would your business cope, if they became seriously ill or died? Would you need to consider insurance cover to pay out in such a situation?

Specialised insurance

There are a whole host of different policies which cover a range of specialist situations, e.g. engineering insurance and computer policies.

If you are starting, or have started a business in Chislehurst, Bromley, Kent and London areas we, at Adiva Accountants in Chislehurst, can provide further help on insuring your business. So please do not hesitate to contact us at Adiva Accountants in Chislehurst for further advice.

Working from home

Don’t assume that your normal household insurance will be enough, if you are starting your new business from home. Home insurance will not usually cover business risks. However, it is possible to obtain special ‘working from home’ policies.

Level of cover

It is important to shop around to get the best deal for your insurance. You should obtain several quotes before deciding which deal is the best for you. A personal recommendation may be the best way to decide.

If you get too much cover your cash flow will suffer, but too little or no cover and the consequences can be catastrophic.

With buildings and equipment cover make sure you are covered for the full replacement cost. If there is to be an excess on any policy make sure that it is set at a sensible level.