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3 Steps to Insuring Your New Business

If you’re currently working for someone else, setting up on your own can be intimidating and liberating all at once. You’ll no longer be answerable to anyone but yourself, but it also means responsibility for every detail lies with you – including the more finicky stuff like insurance. But this doesn’t have to be as complicated as it sounds. Here are three simple steps to ensuring your new business is covered from top to toe.

1. Work out your risks

Risks vary from business to business, but there are two important questions to ask yourself to work out your major risks: What could go wrong at my business? And have I got it covered? Once you’ve thought about these, it becomes easier to figure out the kind of insurance that will best protect you. Common risks include:

  • fire or natural disaster, eg floods, earthquake
  • theft, eg equipment
  • stock damage
  • loss in transit
  • health and safety breach

There are also risks you may not realise insurance can cover, including your legal liability for injury or property damage caused by your products or services.

2. Figure out what you need

No single policy can cover all the risks you’ve identified, so it’s likely you’ll need more than one policy. When working out your insurance budget, try and balance this with the cost if you didn’t have insurance. Here’s an overview of some of the most common kinds of policies:

Click the titles to expand each section

Business Assets

What it could do:
Help protect your business, assets whether you work from your own premises or are out and about.

What it could cover:

Tools cover
Covers accidental damage to your tools and equipment

Business mobile equipment cover
Covers accidental damage to portable electronics and essential business equipment

Business stock cover
Covers accidental damage to stock you need for your business

Business building cover
Covers accidental damage to the buildings you own

Business contents cover
Covers accidental damage to the equipment at your business premises


Business interruption

What it could do:
Cover you for loss of income or profit if you’re unable to trade after an accidental loss, getting you back on track.

What it could cover:

  • Lost income if your business isn’t able to operate after sudden and accidental loss or damage to your premises
  • Expenses incurred to keep your business running after a loss
  • Costs for accountants and specialists involved in quantifying your claim

Liability

What it could do:
Help cover you for legal costs and certain fines if you accidentally injure or damage other people or their property.

What it could cover:

Public liability
Covers you for legal liability for accidental injury to a person and damage to someone else’s property while you’re doing business.

Statutory liability
Covers legal defence costs and certain fines if you accidentally breach legislation.

Employer’s liability
Covers legal liability if your employees are injured and it’s not covered by ACC.


Business vehicles

What it could do:
Help cover loss or damage to your business vehicles, so you can keep moving.

What it could cover:

  • Repair your vehicle after an accident
  • Pay for your vehicle up to market value if the vehicle is uneconomic to repair after an accident
  • Legal liability protection for damage and injury you cause while using your vehicle
  • Transport and towing expenses after an accident
  • Windscreen and windows damage
  • Protection against uninsured drivers
  • Manslaughter defence

Machinery breakdown

What it could do:
Help keep your business going if your equipment breaks down

What it could cover:

Sudden and accidental breakdown of mechanical, electrical or electronic plant and equipment

Repair your machinery
Pay for your machinery if it is uneconomic to repair up to market value for machines over 5 years of age and replacement for anything newer that 5 years


3. Know the ins and outs

Once you’ve figured out the kind of cover you need, get in touch with your insurance company for a quote. They’ll sort out your cover, and send your insurance policies to you. Remember, your policies are legal documents, so you need to read them carefully. They might contain jargon or legal terms you haven’t come across before– so be clear what you’re signing. If you’re not sure about things like disclosure or excess, ask your insurer for clarification before you commit. And remember, you’ll want to review your cover at least once a year to ensure you’ve allowed for growth and other changes.