Business insurance for entrepreneurs and start-ups

Starting a new business can be terrifying. There are so many dynamics to consider and adding insurance to that list can be overwhelming. However, without sufficient cover your venture may crash before it has the chance to take off.

Theft, fire, liability, cybercrime and fraud by employees are only a few of the potential perils facing businesses. A sensible businessperson would want to protect their business and customers to ensure a sustainable enterprise that can grow securely.

If you are running a business from home, the risks covered by your personal insurance versus those covered by business insurance can get confusing. The key-determining factor is the nature of the risk. If the claim arises from your business activities, your homeowner’s policy will not provide any insurance cover. To be sure, talk to your Garrun broker for specialised advice.

Garrun Group recommends that you look at the following types of insurance for your start-up or small business:

Business premises and contents
You must insure any building structure you own, unless you work from a home that you own and is already insured. This, obviously, does not apply when you rent premises.
Secondly, everything inside the building must also be insured. This includes all machinery, equipment, furniture, electronics, fittings and stock – basically everything that helps you operate your business.

Business interruption insurance
You will need business interruption insurance to cover times when your business suffers a loss of income due to an unforeseen disaster. This type of insurance provides cover for a stipulated period of recovery and rebuilding. It will cover loss of profits and/or increase in working costs for the elected indemnity period. If your business is interrupted by an insured peril, being covered will enable you to remain operational and honour on-going financial (and other obligations) to your suppliers, customers, staff and other stakeholders.

Read more about business interruption as an evolving risk category in our blog on the subject.

Professional liability and fidelity cover
Also called professional indemnity cover, professional liability insurance is aimed at businesses that offer advice to clients. This covers instances where the advice your businesses has provided proves to be faulty or deficient, or your business can be held liable for any damage or loss incurred by the client.

Fidelity insurance provides cover against any theft or fraud by an employee where you can prove the employee gained financially. Financial fraud can devastate a small business quicker than most business owners realise, making fidelity cover vital when you employ staff. Find more information on how to protect your business from your employees in our blog on the subject.

Most formal businesses use computers and the Internet to communicate and conduct business. Even if you run your business from home with a laptop, mobile phone and some cloud storage, you could fall victim to cybercrime. The risk increases with the size of the business as servers are more often targeted and bigger businesses present more reward for cyber criminals. There are a number of ways to protect your business from cybercrime – more advice on that here.

Read more about cyber risks and mitigation.

Money kept on premises
Even for a small business it is important to know how to handle and transport cash safely. If your business offers cash payment services, you must take measures to avoid the associated risks. Smaller businesses are often targeted by thieves as their security measures are usually poorer than larger businesses.

The amount of cover your business needs will be based on your specific risk profile. Talk to your Garrun broker for tailored advice and a free quote.