Your profession
What you do for living will decide the insurance rate of your liability insurance. It’s therefore important that you choose the most relevant description. Don’t be tempted to include every option just to be on the safe side. It could costs unnecessarily too much. If you’re unsure, pick the phone and discuss your business with the insurance provider.
For example if you’re an estate agent, your rate will be much higher if you include valuations for other than marketing purposes in your selected activities. Your cost of liability insurance is likely to go up as this is considered a risky category by the insurers.
If a particular business activity is causing your premium to become too high or you are struggling to get insurance because you have suffered a claim as a result of this activity, consider outsourcing to reduce your cost and protect your business.
Your business activities
What type of business liability insurance you will need depends on whether you provide advice, deal with the public and employ staff. Professional indemnity insurance is an essential cover for businesses that provide professional advice to their clients.
If your business deals with the public, has a face to face contact with customers or to third party property, provides products, you will need to consider public and products liability to protect your business. The moment you take on a member of staff, you must by law maintain employers’ liability insurance.
Your claim history
Insurers of business liability are very sensitive about past claims. In their opinion a liability claim is an indicator of a failure in the business management. If you are in the unfortunate category of having experienced a legal claim against you, make sure you can demonstrate how you have addressed the issue so that it won’t happen again. Insurers are always looking for the best risk management practices which can help to keep the cost of business insurance down.
Your turnover
It really pays off to think about how much you will make in the next 12 months. If you overestimate, you might end up paying too much but you don’t want to underestimate the figure either as that could affect your insurance payout.
However, if during the year you realise that you may be trading under the estimate you gave to your insurance providers, it is worthwhile going back to change the statement. A decent insurance provider should offer you a reduced rate. If not, it’s time to run business liability insurance comparison.
Compare liability insurance for small businesses
Price comparison sites make it seemingly easy for you to compare the market. However, that is not the case at all and you’re in fact seeing less than 1% of what the UK insurance market has to offer.
Only a handful of insurance providers can afford the cost of featuring on those sites, majority of which are owned by the same company. If you really want to see relevant results to your business, you’ll need to have the patience of scrolling through to page 2, 3 and more of google results. Alternatively you can use inverted commas around your search terms in google, for example “compare liability insurance small business”.
