It is important to identify the risks and make sure your business is protected, not just through insurance, but through the way you conduct your business:
1. Obligations – yours and your partners'
Many small businesses build a reputation on being friendly and personal but the reality is that to run a professional business regardless of size, you should consider putting official contracts in place. A contract is the only thing there is to make sure all parties involved in business do what they say they will. It's also the only line of defence if you have a problem with your partner or supplier.
A contract will help you protect your business from common issues that cause conflict, clarifying important factors such as:
- What is expected of each party and when
- How much money is due and when
- What strategies have been put in place to ensure quality
- Timeframes (for services provided)
Contracts are vital for many aspects of running a business and you should have them between you and your employees, with business partners, suppliers and customers. Without them, you leave your business open to losses.
2. Fact or opinion – which is more damaging?
With our growing appetite for media, and the surge in online networking and reviewing – reputation is everything. Defamation can be damaging to your business and can come from many directions: an employee who leaves your company and badmouths you to competitors, an unhappy customer posts a bad review of your business online or a competitor makes a direct and defamatory claim in their marketing.
How to protect your reputation
- Know your rights and understand what can be considered as defamation. Defamation is based on fact not opinion, an unhappy customer can post a review of a restaurant saying they didn't like the food – that's an opinion. But if they claim their food was uncooked when it wasn't, that's a false statement of fact and can be considered defamation, because it could harm your reputation.
- Take action. Find the source of the problem and ask them to retract the defamatory statement. If they won't, you may need damage limitation, such as commissioning public relations experts to help get people talking about your business in a good way to turn the tide.
- Consider legal action to stop continued harm. But try and keep some perspective: how much time should you spend pursuing a claim versus time spent building a reputable business.
- You should be careful not to defame your clients or competitors too. If you do accidentally make a defamatory statement, you should advise your insurance company who should help you rectify the situation.
3. Protecting what's yours
Your intellectual property represents your ideas, how you've implemented them and grown your business. It includes your brand (logo, strapline, visual identity), the way you position your business with language, not just advertising lines, but the content of your website – these are things you need to protect.
In the UK and most other parts of the world there are no forms or fees to copyright your communications. As long as you have created and fixed an original work and providing this falls within one of the categories of material that qualifies for copyright protection, you will not have to do anything else. The following three elements will help you to protect your copyright work: the © symbol (the word "Copyright"), the year of first publication, and the name of the author or owner.
Following this procedure and including it on promotional activity, such as on photos and your website, will provide a level of protection under intellectual property law. And if you do find, or suspect that your intellectual property is being used without your permission, you should seek advice from a legal representative.
4. What to do if your business is at risk
If you know, or suspect your business may be at risk, taking action promptly is key in minimising potential damage. It's also a standard condition of many professional indemnity policies, insurers may reject a claim if they feel it could have been avoided, or made less damaging with earlier notification. So protect your business and always notify your insurer if:
- you receive a complaint from a client , which might lead to a claim
- you realise you have made a mistake and can’t easily resolve the problem
- you receive a series of escalating complaints on a project
- a client withholds payment to you after a complaint
- you become aware of a shortcoming in your work that you can’t easily put right.
Find the right protection for your business
The way you do business changes, so it's vital that your insurance cover reflects this and that you review it regularly to make sure it fits your needs. At Hiscox, we understand that the contracts you are working on now may be different in a year, maybe even in the next month. So we offer the flexibility to increase your level of cover at any time, so you can be sure you are adequately protected.
More information about Hiscox Business Insurance >