Q&A: What insurance cover
do I need?

Malcolm Tarling is general insurance adviser at the Association of British Insurers (ABI). We asked him what insurance start-ups should consider.

Where should I go for advice?

Malcolm Tarling (MT): "No business is the same. Policies come in different shapes and sizes, so seek professional help from your trade body or an insurance broker. The British Insurance Brokers' Association (BIBA) website is a good place to start.

"An independent broker can help you select the right level of cover, as well as decide which risks pose the greatest threat. While some brokers charge a fee, most get paid by the insurance company they recommend to you."

What cover am I legally obliged to have?

MT: "Certain types of insurance must be purchased by law. If you have company vehicles you need at least third-party motor insurance, of course. And if you have staff, you need employers' liability insurance. This covers your business against claims from employees for accidents or illnesses that occur as a result of work."

Anything else I should consider?

MT: "There are no other legal obligations, but professional indemnity insurance might be required in some professions, such as law and accountancy. This protects you against action taken by other businesses or by members of the public who believe they've been given bad advice.

"It's also sensible to insure your premises, fixtures, fittings, equipment and stock against disasters such as fire, flood and theft, by taking out buildings and contents insurance."

What if a disaster was to occur?

MT: "Business interruption cover pays for the knock-on effects. It protects against any loss following an event such as a fire or flood that stops your business being run in a normal way. It can help keep you afloat until your business gets back on its feet.

What about my employees?

"Key person insurance can be useful if the success of your business relies on a few significant employees. It protects the business against loss of profit in the event of their death."

Can I protect my business from being sued by customers?

MT: "If you carry out activities that could affect members of the public, you might consider public liability insurance. This covers damages and legal costs if a member of the public dies, is injured or suffers damage to their property because of your business activities.

"Product liability is also available to cover the costs of damage or injury caused by products you make, sell or repair."

Action points:

• For help finding an insurance broker visit www.biba.org.uk
• For advice about the basics of business insurance visit the 'Starting up' section of the Business Link website at www.businesslink.gov.uk
• Find out more about business insurance at www.abi.org.uk

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