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 The risks of setting up in business are well documented. Fear of failure is probably the most powerful deterrent for entrepreneurs. But what is surprising is how many successful start ups risk everything they have built up by failing to protect their business with appropriate insurance cover. Franchises like any business are not immune to disasters and without necessary cover the consequences can be devastating. Some insurance is required by law such as employers' liability and vehicle cover. Other types of cover, such business interruption, can be essential in keeping your business going when there is an unforeseen situation such as an accident or fire. When it comes to taking out insurance for your business it can be a minefield. Some business owners are confused about which insurance policies they need and they can often spend unnecessary amounts of time and money duplicating effort and cover by taking out too much cover. It is therefore important to make a comprehensive list of everything you would have to replace if your business was wiped out and then check with your insurer that you have the right level of protection. It is worth carrying out an annual audit to see how your business needs have changed and review your insurance accordingly. Crimes against businesses can be very costly especially when stock, equipment and premises could be damaged. When considering security you need to identify which crimes your business is most susceptible to. Theft from a vehicle or your premises, arson or vandalism can all have a major impact on your business. Your insurer can advise you on minimum security requirements or exclusions to your policy. The measures you take depend upon a number of circumstances such as your location, types of products you sell, trading hours and staff. There is no point wasting money on a sophisticated security system if there is an equally effective and cheaper deterrent to thieves. It is your responsibility to supply accurate information to the insurance company and in some circumstances incorrectly valuing your assets could affect your claim. If you cover your assets for more than they are worth (over-insure) you will pay higher premiums than necessary. If you cover your assets for less than they are worth (under-insure) you will not have allowed enough compensation to cover all your losses. There maybe an excess built into the policy, which is the amount of every claim for which you are responsible. You should be aware of any pre-set conditions and exclusions that may exist with the cover. The cheapest insurance policy is not always the most cost effective in the long run. You should examine the potential insurance provider to check their expertise in your industry as well as their own financial history and claims process before you decide to take a policy. |
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