Case study

Liability insurance

Ensuring our business has the right insurance - IC Innovations

Sheffield-based IC Innovations is a consumer product design company that turns innovative ideas into real products. It handles everything from concept development through to manufacture, retail and international distribution. The business' multi-faceted operation presented a challenge when it came to getting the right insurance. Here managing director Tristan Cowell explains what they did.

What I did

Get advice

"Our business had several potential areas of liability when it came to selecting insurance products. We initially contacted the Sheffield Enterprise Agency for advice and they were able to point us in the direction of a local insurance broker. It was important to us to have someone who was on the doorstep so that we could talk face-to-face and bounce queries off them.

"We don't use our broker for every type of insurance. For some of the more common products, such as compulsory employers' liability (EL) insurance, it's simpler and cheaper to do it online. You can get some very competitive quotes if you shop around."

Assess product options

"In addition to EL insurance, we needed product liability insurance and public liability insurance from day one, as we knew that clients would insist on it. Our broker arranged both for us.

"Another area they suggested looking into was insurance of goods in transit and during warehousing. In both those cases, we checked with our haulage company and warehouse contractors and found we were covered by their own insurance. However, you should never assume that's the case - always ask.

"It's useful to remember that just because a particular insurance product exists, that doesn't necessarily mean you have to have it. For example, we considered patent protection insurance, as we held several product patents, but decided against it. It was very expensive and we calculated that we already had enough money set aside to defend a patent in court if the need arose."

Address overseas trade

"As the business grew and we began trading in the USA, this raised new insurance questions. We went back to our broker and they advised finding a specialist US-based broker who was 'on the ground' out there and knew the market well. This has worked out very well.

"We also started outsourcing production to China, which meant once the goods arrived at a Chinese port, they became our responsibility for the voyage to the UK. We found a shipping agent who was also able to advise us on marine cargo insurance. Over time, we've learnt that there isn't always a logical correlation between the size of the shipment and the insurance cost! So again, it pays to research all the options."

Review our insurance regularly

"We review all our insurance every year to make sure we're up to date with legislation and that we're getting the best deals. It's also important to revisit policies when we introduce a new product, as it may have specific insurance requirements."

What I'd do differently

Take on a US broker sooner

"When we first started trading in the US, we thought the best way to buy the appropriate insurance was via a UK company. However, this proved unbelievably costly and I wish we'd sought advice from our original broker and got our US-based broker on board sooner."