Can I Get Business Liability Insurance Before Registering My Business?

Can you get business insurance before registering your business? The short answer is that you can get the process underway. However, there are a few things to consider before going ahead.

Understanding business insurance requirements

When deciding on business insurance, it’s crucial to know exactly what a policy includes and what type of insurance you need for your business. Cover varies from business to business and can include buildings and contents cover, business interruption, and cyber liability to name but a few. However some of the popular types of business insurance policies include professional indemnity insurance, public liability insurance and employer’s liability insurance.

• Public liability insurance can protect you from claims made by a third party in the event of accidental damage or injury caused by your business operations.
  
  
• Professional indemnity insurance can help cover legal defence costs and compensation claims made against you as a result of giving bad advice or making mistakes.
  
  
• Employer’s liability insurance can help protect you against claims made by your employees. These kinds of claims could arise due to accidental bodily injury, illness or disease suffered due to your business activity where you have been at fault.

Obtaining business insurance

The type of cover you need and the cost of your premium will depend on a few factors.

• Business nature and activities
• Types of premises worked at
• Estimated annual turnover
• Number of employees and estimated wage roll
• Geographic location
• Claims history

Timing of insurance relative to business registration

Sorting out your business insurance before official registration is not only possible, it can be very smart.

You can get the process underway to ensure cover is in place from when you start to acquire assets and occupy premises with initial cover to protect the risks that exist in preparation for when trading commences.

Cover will be set to commence from the date of registration to cover activities as they develop. This means you’re free to set up your business insurance in advance and arrange a start date to commence from the date of your registration, to cover activities as they develop.

This is known as forward-dating. It’s when your cover is arranged to start from a future date, such as your business registration date. This approach ensures your business is protected right away. Practically, it provides peace of mind and safeguards against potential risks during the early stages.

Benefits of early insurance coverage

Obtaining business insurance early offers several key benefits. Firstly, it protects your initial investments. Your money, equipment and premises are covered from day one, at a rate you can lock in as soon as you know what date you need cover from.

Early coverage can also safeguard your business during its early operations. When you first start out, your business is vulnerable and things may go wrong. Business insurance could provide a safety net against unexpected events.

Forward-dated insurance policies make this possible by allowing you to begin your policy before you start operating. This ensures seamless protection, giving you peace of mind and a solid foundation to focus on growing your business.

Steps to take when applying for insurance pre-registration

To secure business insurance before registration, follow these steps.

1. Research insurance providers

Identify reliable insurers experienced in your industry.

2. Assess your needs

Determine the specific coverage required for your business assets and operations.

3. Consult an insurance broker

Discuss your plans and specific needs to receive expert advice.

4. Gather necessary information

Prepare details about your business plan, anticipated start date and any potential risks.

5. Request a forward-dated policy

Arrange for your insurance to begin on your expected registration date.

6. Review and confirm

Carefully review the policy terms and confirm coverage details.

Legal and financial considerations

Early insurance coverage involves key legal and financial considerations. Legally, insurers may require proof of intent to register your business, such as a business plan or registration application.

Financially, paying premiums before operations begin can impact cash flow, so budget accordingly. Forward-dated policies, while a great idea, may have limitations like restricted coverage or higher premiums due to the unknown risk profile.

Always review policy terms carefully. Don’t hesitate to reach out to both legal and financial advisors to ensure compliance and financial practicality.

Ready to get covered?

Securing insurance early protects your initial investments and can help your business in those vulnerable first stages. Forward-dated policies allow coverage to begin on your business's registration date, ensuring seamless protection from day one.

By consulting with an insurance broker, you can tailor a policy to your specific needs and comply with legal requirements.

Business insurance from Towergate

If you’re ready to get started, we offer business insurance policies tailored to you. Get a quote today either online, or by phone on 0344 892 1664.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.