New Business Insurance

Misteeq

Hi,
Hoping someone can help me please....
I'm setting up a new 'Retreat' Business, which I'm hoping to start next year. Briefly, people will pay me and I will then pay the hotel. Included in the price is an overnight stay in a hotel. I rang Direct Line as I have various personal policies with them and they said they were unable to help me. They put me in touch with Cowen Insurance who said that I need 'Tour Operator' Insurance as I'm offering an overnight stay to guests. They also said they couldn't help me. Cowen Insurance put me in touch with Event Insurance Direct. When I rang Event Insurance Direct, they said they would recommend Public Liability and Cancellation Cover. When I queried whether I would need 'Tour Operator' Insurance, the reply was - 'well it's up to you really'.
The hotel have just confirmed they do not require me to have any insurance.
So, I'm a little confused on what type of insurance I will need for my business.
Can anyone help please? 
Does anyone else have a 'Retreat' business they can advise me on what insurance I need?
Many thanks.

Sandtree

The legal need for insurance comes from either legislation (which in this context is almost certainly limited to only Employers Liability and then only if you have employees, volunteers etc who are not direct family members or co-directors) or contracts (eg the hotel may require you to have Public Liability)

Outside of legal need there is those items that are just good business sense... if you have a warehouse full of £10m of stock its probably sensible to insure it in case it burns to the ground even if there is no legal need for the insurance.

In the first instance, check if any of your contracts require you to have insurance, PL is the most likely.

Outside of that consider what risks you are running and if you feel it is necessary to transfer those to an insurer... eg what happens if you are sick on the day? If the hotel has double booked? If someone hacks into your computer and steals the personal details in your client database? If someone is doing one of your events and gets injured?

Exactly the name you put on the product will depend exactly on what you are selling... eg is transport to the event included or just the hotel9

oldbikebloke

you need to understand your business liabilities...
you collect the money, you will be the first port of call if someone has reason to make a claim

do you think you will always have zero liability as it will always be someone else's fault, so you will be able to counter sue your supplier on the basis they are the labile party, not you?

do you need insurance for any of the above as you lose a claim before winning your counter sue, so what would happen to your cashflow in that case?

CKhalvashi

If you're offering anything off of the property, you may need to register as a tour operator, meeting the financial requirements to do so. This will naturally include ensuring that everything is protected.

If employing anyone, you will need employers liability insurance, you will also need insolvency insurance if you have to register as a tour operator.

I'd also go for Directors Indemnity Insurance if registering as a Limited Company, plus legal liability insurance to ensure you're covered in the event of legal action being taken against you, in addition to insuring any premises and stock.

The cost of these policies are optional, however in general will cost less than if something goes majorly wrong.

Mistral001

The insurance companies are not quoting because they are not in the business of helping people set up businesses.  

As has been said insurance is only really required under the law if you are an employer.  Getting insurance is down to you making a business decision by assessing the risks.  For example if someone gets food poisoning at a hotel that they booked through you, are you going to be sued?  Well if the hotel has public liability insurance there probably is little risk of you being sued.  The risk that you will be sued could  be increased if they don't have public liability insurance.  

I would look at your terms and conditions to see what you are liable for and what you are not and get legal advice if necessary to clarify it for you.  

Misteeq

Thanks for all of your replies - some good advice there.

CKhalvashi

Mistral001 said:

The insurance companies are not quoting because they are not in the business of helping people set up businesses.  

Wrong. I've found insurers very helpful when I'm not sure on something, alongside other research and more formal advice where necessary.

It's in their interests to be helpful as they want OP's money. It's therefore potentially important to ensure that it's not the only advice they take.

As has been said insurance is only really required under the law if you are an employer.  Getting insurance is down to you making a business decision by assessing the risks.

I didn't say that, I explicitly stated that if OP has to register as a tour operator (I have some experience in travel, however my experience isn't dealing with this type of package/LTA which is why I can't clarify), then they will have to hold insolvency insurance, ensure that money is held in designated client accounts (other options are available) and ensure that certain other legal requirements are met.

This is the current legislation (click here), which will be carried over into 2021 with the exception of being able to sell into the EU from the UK. I post the EU website because it has a lot more helpful information than the UK government, especially in relation to clarification of the expected approach to the current situation.

If OP is offering a transfer service to/from the hotel, a Private Hire Driver, Operator and Vehicle license may also be necessary. This again will require specific insurances. An Operator license will be required only if this is contracted out.

Sandtree

CKhalvashi said:
Wrong. I've found insurers very helpful when I'm not sure on something, alongside other research and more formal advice where necessary.

It's in their interests to be helpful as they want OP's money. It's therefore potentially important to ensure that it's not the only advice they take.

Its probably worth noting that insurance can be sold on an advised or non-advised basis, in personal lines (excluding high net worth) it is predominately non-advised whereas commercial insurance is more commonly advised (unless you approach an insurer directly). However for both the other also exists.

With non-advised they will simply give you the cold facts of the policy and it is up to you to decide if it meets your needs or not and there is no comeback if you make a mistake. Advised is a more complex affair but they should give you a recommendation of what to take and provide any assumptions that this recommendation is made on - most advised work is done with reasonable diligence but you'll aways get the occasional dud (but thats why they have their own insurance)

Mistral001

CKhalvashi said:

Mistral001 said:

The insurance companies are not quoting because they are not in the business of helping people set up businesses.  

Wrong. I've found insurers very helpful when I'm not sure on something, alongside other research and more formal advice where necessary.

I have also found my insurance company very helpful as well.  I call from time to time to get advice, but that is only as an existing customer.  They even have solicitors who I can contact free of charge if they think it is appropriate, but when I was a prospective customer it was completely different.

Sandtree

Mistral001 said:

CKhalvashi said:

Mistral001 said:

The insurance companies are not quoting because they are not in the business of helping people set up businesses.  

Wrong. I've found insurers very helpful when I'm not sure on something, alongside other research and more formal advice where necessary.

I have also found my insurance company very helpful as well.  I call from time to time to get advice, but that is only as an existing customer.  They even have solicitors who I can contact free of charge if they think it is appropriate, but when I was a prospective customer it was completely different.

Are you actually meaning an insurance company, rather than a broker or other intermediary? If so then its predominately as almost all insurers only sell direct insurance on a non-advisory basis and so cannot legally give advice.  Brokers on the other hand, excluding certain mass market options targetting SMEs, tend to be advisory in nature and so can and normally do discuss things (obviously only if relevant to the sale of insurance - they won't advise you on that funny itch you've had down there for a few weeks)

Mistral001

Sandtree said:

Mistral001 said:

CKhalvashi said:

Mistral001 said:

The insurance companies are not quoting because they are not in the business of helping people set up businesses.  

Wrong. I've found insurers very helpful when I'm not sure on something, alongside other research and more formal advice where necessary.

I have also found my insurance company very helpful as well.  I call from time to time to get advice, but that is only as an existing customer.  They even have solicitors who I can contact free of charge if they think it is appropriate, but when I was a prospective customer it was completely different.

Are you actually meaning an insurance company, rather than a broker or other intermediary? If so then its predominately as almost all insurers only sell direct insurance on a non-advisory basis and so cannot legally give advice.  Brokers on the other hand, excluding certain mass market options targetting SMEs, tend to be advisory in nature and so can and normally do discuss things (obviously only if relevant to the sale of insurance - they won't advise you on that funny itch you've had down there for a few weeks)

I am talking about a broker in fact.