Sure about insurance?

Chris Little explains why you need insurance when buying a franchise

 

Franchising presents a great opportunity to start up a business under the umbrella of an established brand and a proven business format. As with any other start-up business, there is so much to think about and while the franchisor provides valuable support, there are some areas in running a business that are the responsibility of the franchisee. One such area is business insurance, which provides essential cover in an array of situations so it's important to understand the key areas of cover.

Starting up a business can be a daunting experience, particularly if you are venturing into the realms of being a business owner for the first time. However, it's important to tackle areas such as business insurance head on to ensure your valuable assets are adequately protected.

There are various channels available for purchasing an insurance policy. As the owner, you know your business the best, so going directly to the provider means that not only can you fully understand exactly what your company is covered for, but you can also be sure that the insurer is provided with clear and accurate information about your company.

When you first set up your policy, the insurer will ask a series of questions to help determine which insurance product is right for you. Needless to say, it's vital you are honest with your responses and realistic with the level of cover you need. Check how much cover you receive as standard for things such as goods in transit or loss of money as these can vary between insurance providers.

One key area of the policy is business contents, which covers the cost of replacing or repairing your trade contents and stock in the event of an incident such as a fire, malicious damage or theft. Consider the value of the contents taking into account all equipment such as computers, kitchen appliances, cash tills, furniture and any food items.

To protect your business property, don't forget to ensure that security precautions have been taken. Most insurers will require you to have a minimum level of security, such as a certain type of alarm and specific locks on external doors. Unfortunately, failure to comply with these requirements can invalidate the policy, so its important you check the terms of your cover.
Depending on whether the premises you are working from are owned or leased, you may need to insure your buildings against rebuilding costs should a disaster occur. In addition, for business owners that may live on the premises, which is common with publicans and shopkeepers, you should also have the option to include household contents cover to protect personal items in a similar way to home insurance.

Employer's liability is a legal requirement for any business that employs staff and it covers costs if your business has to pay damages to an employee as a result of injury or disease caused whilst working. Anyone who works for your business is an employee, whether they are under contract, temporary staff or taking part in an apprenticeship or work experience scheme. There are some exemptions, such as if you are the sole employee of your limited company or in a partnership with no employees.

Other essentials, which should come as standard on an insurance policy include public and products liability, which protects your business in the event of the public being injured or their property damaged as a result of your business activities, or for damage or injury caused by defects in your products. This is obviously valuable when the business is centred around providing a service or goods to the public.

There is a lot to think about when establishing a business, but there are suppliers out there in addition to the franchise company who can provide support to help set you off on the path to success. With an array of insurance providers to choose from and policies varying between companies, it really is worth taking the time to shop around for a company that understands your business and gives you the most appropriate cover for the best value