Who to consult and how insurance works

To decide which type of insurance adviser you need you should identify the risks to your business.

You should consult:

·        An independent financial adviser (IFA) for people-related risks and business-planning issues, such as life assurance, protection, health and business continuity. IFAs also deal with pensions and investments - see our guides: know your legal obligations on pensions and pension planning for the self-employed.

·        An insurance broker for general and commercial risks, such as motor insurance and employers' liability insurance.

Some firms offer both IFA and broker services but if your adviser does not deal with a particular type of insurance they should be able to direct you to an alternative provider. See the pages in this guide on where to get advice on choosing a broker and where to get advice on choosing an independent financial adviser.

Insurance brokers, advisers and other insurance intermediaries are regulated by the Financial Services Authority (FSA) and you should make sure that your adviser has FSA  authorisation .Check that an insurance broker is regulated by the FSA on the FSA website.

Always be honest

Honesty is essential in all dealings with insurers. You have a duty to tell the absolute truth, in other words to act in utmost good faith.

Providing incomplete information or withholding something that is relevant can invalidate a claim, contract and policy. Relevant information is a broadly defined term and if you have any doubt at all regarding the relevance of information you should declare it.

Your adviser can assist in deciding the relevance of information submitted to the insurance company.

How premiums are calculated

Your premiums will be calculated based on the information you give and the history of similar business types. Your premiums can be affected by the claims you have previously made and by the levels of risk attached to people in your employment or to your business and assets.

 Presenting your risk details

A comprehensive health and safety risk assessment is the first step to compiling a presentation of your risks. You can conduct assessments for other types of risk, such as fire and security - which could include premises, vehicles, workers and IT. For more information, see our guide on how to insure your business and assets - general insurances.

Assess your risks

With the assistance of your insurance broker you should carefully assess your insurance requirements and compile a thorough report of the condition of your business. For more information, see our guide on managing the risks in your business.

A good presentation of your risk details with all the required information and evidence of good practices will help the insurance company to make the right decision about how much of a risk your business is and how much premium to charge.

It is the job of your insurance broker to help you present the risk. It is also their job to obtain comparative quotes from different insurance companies.

Specialist insurance

Your broker should also identify whether you will need to take out specialist insurance for your type of business. There are many types of commercial insurance you may wish to consider. For more information, see the page on identifying risks and insuring against them in our guide on how to insure your business - people, life and health.

Minimise your risks

You are more likely to get cover if you can demonstrate that you have had few or no accidents in your business and that the business takes safety seriously, with detailed risk-assessment records and comprehensive training practices.

This is especially important for high-risk businesses, such as those that undertake more dangerous activities such as working at height or with dangerous substances.