Considerations when applying for business insurance
Let’s be honest, insurance is not something we spend time dreaming about or tend to get excited about in the office, it’s often seen as a necessary evil and expense. That said, if the worst happens it can be the difference between a business continuing to trade or going bust – so getting the right insurance in place is imperative to any prudent business owner to ensure their business is protected.
Where is a logical place to start when looking at the insurance a business needs?
The most obvious place is the everyday risks a business faces – mistakes, injury, property damage, supply chain issues, digital issues and legal costs etc. Most business owners will be aware of the insurances that cover the above issues such as Professional Indemnity, Public & Employers Liability, Commercial Combined packages, Cyber Insurance and Legal Expenses, and it’s best to start here to make sure that the basics are covered.
As in all walks of life though it’s often what falls through the cracks that trips you up and causes the most pain. The same is true for insurance, as no one ever envisages that HMRC will come knocking and want to look into the tax and/or IR35 affairs of a business.
Granted, IR35 will only apply to those working where a status determination has been made and who work as a Personal Service Company (PSC), but many big businesses start out as one-man bands before growing into a fully-fledged SME. Similarly, HRMC can open an investigation into a business when they suspect something, is part of a thematic review or purely as a random selection – ensuring that no business is ever safe from the prying eyes of the tax man and their inspectors.
Costs - financial and time
As with all events that occur, it’s the costs - both financial and time, in dealing with the issue that can bring a business to its knees, especially when HMRC are added into the mix. Ensuring therefore that the correct protection is in place is imperative, saving a business money, allowing it to focus on their core business rather than be distracted with legal matters, which of course would be dealt with by an experienced expert, and to carry on as normal knowing everything should be back to normal asap.
Claims must be unforeseen to be covered
Finally, the gift of hindsight is something that we all wish we had, and the same goes for insurance. If you know a claim is or might be likely to occur, then you can’t just go and take out insurance and expect the claim to be covered – all claims must be unforeseen and unfortunate. It can’t be stressed enough that by spending a little up front can save a lot further down the line, so when weighing up ‘is it worth it’ just take a moment to envisage the worst-case scenario and the damage it would cause, the disruption that would result from it and most importantly would the business be able to trade through it and survive.
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