In a recent BBC interview – Sir James Dyson highlighted the need for investment into hardware and engineering projects within the UK. He has opened a new building, the Royal College of Art’s Dyson Building, which will provide a home for start-up firms producing tangible products rather than software.
Investment back into the UK has to be a good thing during the troublesome economic climate we are experiencing currently. From an insurance perspective, these new firms have several areas that they should be considering to protect themselves properly.
The provision of advice or design input into a project could lead to claims for negligence and/or errors/omissions. These would be covered by a Professional indemnity insurance policy. Engineers and other Design consultants can purchase cover to protect themselves, including cover for breaches of confidentiality, intellectual property issues and defence costs in the event of a claim.
The sale of an actual product should be protected by Product Liability insurance. This cover is available as part of a business insurance policy such as a commercial combined policy or similar small business insurance policy. In addition, these policies can cover stock, machinery and plant, computers and other assets of the business.
If the firms are set up as limited companies, we would recommend that they purchase Directors and Officers insurance cover too so that they are covered in the event of breaches of companies act legislation and similar rules/regulations. Such policies cover representation costs in the event of a claim/complaint or investigation against the directors personally.
Each firm is likely to be different in it’s approach and aspirations but each should give careful consideration to protecting their business with relevant insurance cover. Claims made against fledgling companies who are not adequately insured could lead to financial ruin before the company has had chance to grow.