Top insurance considerations for up-and-coming entrepreneurs

Top insurance considerations for up-and-coming entrepreneurs

For any aspiring entrepreneur, starting a new business is a thrilling process. Deciding what you’ll do, how you will operate and where your business will be located are among the ‘fun factors’ to consider at the outset. But while this is an exciting journey, once your business is in operation, you need to ensure that you are safeguarding your venture with the right kind of insurance cover.

An adviser is best placed to address your unique needs and the various risks that might disrupt your operations or even put you out of business if you don’t have protection in place. Insurance may be one of the least exciting steps towards building a booming brand, but it can turn out to be the best part when the unexpected happens.

The specific risks facing your business will ultimately be determined by the industry you operate in. However, every business owner is exposed to business continuity risk due to unforeseen events, fraud, cybercrime and other factors that may be encountered.
Commercial insurance gives you peace of mind, and with the help of an adviser, putting a robust strategy in place to protect your latest project and assets will provide comfort should disaster strike.

Be future-fit
Consider the roof over your head as well as what is under your roof, and whether these items are covered for their true replacement value. These factors typically increase year on year as the cost of living (and rebuilding) rises. You need enough commercial buildings cover to protect your premises in the event of a fire or flood, or if a geyser bursts and destroys your office or stock. Adequate business contents cover is also needed to keep operations going if some equipment is damaged or stolen. And don’t forget the all risk items you carry with you to and from work, which so often are the essential tools of the trade to maintain business operations.

Be fallout-ready
Also consider liability insurance in case a third-party claim arises against you – for example, if you are unable to complete an agreed-upon service by the contract date due to unforeseen circumstances, and you client suffers a loss as a result. If your client were to sue you for this, how would you manage the associated costs? Contractual liability insurance has you covered for these types of scenarios.

Business interruption cover exists for those unexpected issues that prevent you from operating ‘business as usual’. Having this cover will provide your business venture with resilience and longevity.

Depending on the size of your team, key person insurance may provide protection against unfortunate events such as death, disability or critical illness, and helps ensure your business remains operational under such trying circumstances. While such eventualities are unpleasant to think about, rather be prepared for the unexpected.

Be fraud-aware
As many businesses operate online – be it their core offering to service clients or simply to run operations – cyber risk becomes a possibility the moment they go online. While some businesses are bigger targets for cyber attacks, such as databases that are rich in personal or financial information, the size of a business doesn’t really make a difference – criminals continue to be sly and desperate. If you have data to steal, you’re at risk, so measures against accessing data should be in place alongside cyber insurance cover to manage the impacts of a security breach.

Unfortunately, crime or fraud can come from within as well, committed by a dishonest employee. Fidelity insurance is a tool to protect your business against losses incurred as a result of staff stealing from or defrauding your business. Your type of business, staff and stock levels will be factored into the level of fidelity insurance you will need. For small businesses in particular, fraud can be very difficult to recover from if they don’t have a financial safety net.

Be prepared from the outset
It is important to remember that life typically happens while you’re busy making other plans. This is why consistent and up-to-date insurance is so important, and advice tailored to your business and its unique risks can make all the difference. You can’t predict what may be around the corner, but if you adequately insure your business against the above eventualities, you will be a stronger brand because of it.