Article by PolicyBee

Every business needs some protection. And small shouldn’t mean vulnerable.

Whatever business you’re in, terms and conditions are a good way to set expectations, lay down rules, or give guidelines.

Whether you sell a product or provide a service, it’s always wise to get down to the nitty-gritty with clients and customers before things have a chance to get ugly. No matter how small you think the chances are of something going wrong.

What are terms and conditions?

Terms and conditions can go by lots of other names. Business terms, terms of service, terms of sale, or terms of business…

They’re basically a set of terms or conditions (they actually mean the same thing…) on which you agree before you do business with someone. Or supply a customer with goods or services.

Why you need them and when you use them will depend on what kind of business you run.

Who needs terms and conditions?

Ts & Cs aren’t a legal requirement, but it makes good sense for all businesses to have them. They provide consistency, clarity, and reassurance for you and your clients or customers.

So, the simple answer here is – everyone.

They’re more vital for some professions than others, obviously. An architect, for example. Insurers are insistent that architects work to signed contracts and agreements.

When it comes to giving valuable advice or plans (think building surveyors, consultants, and the like), claims can get expensive. So, it stands to reason that insurers want proof that you’re protecting yourself as best you can.

If you’re selling products, you’ll need some terms and conditions to instruct your customers on how to use your products safely, your returns and refunds policy, and how to contact you.

Whatever the size of your company, having terms of business shows transparency and helps build trust.

Why do companies need terms and conditions?

We know we’re repeating ourselves. But when it comes to business, consistency and clarity are really important. Everybody likes to know what they’re getting into before they get into it, right?

That’s why you need terms and conditions.

Depending on what your business does, some or all of these might be relevant to you:

• Prevent abuse. If you own an app or website that people sign up to, you’ll need to have terms of use. This will allow you to explain what you deem acceptable use, and how you’ll use their data, etc.
• Protect your intellectual property. From your logo and name to any creative stuff you’ve put online, like photography, it’s important to state in your terms that it’s yours. And not for the taking.
• Set out the governing law. Whatever country you’re working from, you need to state that you govern under the laws of that country.
• Limit your liability. This might sound like a get-out clause, but it’s not designed to get you off the hook if you do something wrong. It can help to protect you in the event of a financial dispute, though, or quash any unjustified claims.

Can I write my own terms and conditions?

Although you know your business and your clients better than anyone, it’s best not to write your own Ts & Cs. We recommend getting in touch with a legal professional – ideally a solicitor who’s a specialist in your area of business.

There are lots of dos and don’ts when it comes to contracts, agreements, and Ts & Cs. For example, you can’t say you won’t take responsibility for something in an attempt to avoid a claim. It just won’t stand up in court.

So, even if you do decide to write your own, we’d suggest getting it legally reviewed. It’s important that someone who knows the laws around this kind of thing has eyes on it. Otherwise, it could just be a huge waste of your time.

Give them a good idea about what you do and how you work. It shouldn’t take too much time to draw up Ts & Cs that match your procedures.

Are terms and conditions legally binding?

In short, no.

Unlike contracts, Ts & Cs aren’t usually signed and agreed on, and their content is often misunderstood or ignored. So, they’re not automatically legally binding.

If you want your terms and conditions to be legally binding, you’ll need to get your customer or client to physically accept them from the get-go. So, it’s a good idea to incorporate them into your business contracts and get them signed.

If customers are signing up to your app or site, you can ask them to tick an ‘I agree’ box. This is effectively them providing their signature.

Can I get cheaper insurance if I have terms and conditions?

There’s no specific discount available, no. But, crucially, it does show insurers you’re thinking about your risks and that you take your business seriously. You’re a professional professional in other words.

And that counts for a lot.

It’s not so much about getting cheaper insurance. But more about doing everything within your powers to make sure it pays out in the event of a claim.

If you’ve got water-tight terms and conditions, it can sometimes help you out in a sticky situation or prevent a claim from occurring completely. It takes away any element of ambiguity, lessening the likelihood of a dispute.

Looking for small business insurance? Click here to get your personalised quote with PolicyBee today and protect your business with confidence.