The insurance you need depends on your business. Employers’ liability cover is a legal requirement for most businesses with staff, public liability insurance is vital if you’re in contact with members of the public, and professional indemnity insurance is useful if your business offers advice.
Here are the most popular types of business insurance and the reasons why business owners may need them.
If you don’t have any employees yet, then you won’t need to worry about employers’ liability insurance for now, but if you know you’ll be hiring some very shortly, then you might want to consider adding it onto your policy now.
If you’re not sure about how your business might evolve, don’t worry, you can always add more cover at a later date.
For example, if you’re a one-person band, then you won’t need employers’ liability insurance, but you may still want other aspects of your business to be covered.
Once you’ve thought of what you need your insurance to do for you, then you can choose from the covers above and many others to create a policy that suits your needs.
What type of insurance does the business I need?
Think about the kind of work you do and the risks you need to cover: could your business face a compensation claim from a disgruntled client because they believe you’ve been negligent? Is there a chance your business and claim compensation could injure a member of the public? Do you have buildings, contents, business equipment, or stock to insure?
Here are the most popular types of business insurance and the reasons why business owners may need them.
Public liability insurance
Public liability insurance is a crucial consideration if your business comes into contact with members of the public, whether that’s at your premises or elsewhere. It can protect you against compensation claims for injury or damage made by clients, customers, suppliers, or other third parties. Most shops, restaurants, hairdressers, builders, and merchants take out this insurance. Check your client contracts to see if a particular level of public liability insurance is required.Professional indemnity insurance
Professional indemnity insurance is essential if your business gives advice or offers a professional service to other companies, or if you deal with client data or intellectual property. If you make a mistake in your work and your client loses money and sues you, your professional indemnity insurance can cover the compensation claims and legal costs. Some professional bodies and regulators require their members to have this insurance, including institutions for surveyors, accountants, and architects.Employers’ liability insurance
If your business employs staff, you’re probably legally required to have an employers’ liability insurance policy. This covers compensation claims made by a member of the team because they’ve suffered injury, illness, or damage as a result of their work. Individual companies are exempt from the legislation, including some businesses that only employ close family members. To see if you’re exempt, check the Health and Safety Executive (HSE) guidelines or seek advice.Business buildings insurance
Whether you work from home or have separate business premises such as a shop, office, or pub, business buildings insurance should be a priority. If you rent the premises, make sure to check with your landlord to see what’s already covered.Business contents insurance
You can also protect the contents of your business premises, your business equipment, and tools. If these are damaged, destroyed, lost or stolen, this cover will pay the cost of replacements or repairs.Stock insurance
If you hold any stock, whether on your premises or in storage, stock insurance will cover the cost of replacing it if it’s damaged, destroyed or stolen.Product liability insurance
Product liability insurance protects you should a customer of yours suffer damage as a result of a faulty product you provide. You may be held liable for damage even if you didn’t manufacture the product.Personal accident insurance
Personal accident insurance covers serious injury or death caused by accident. It can payout for lost income, medical costs, and hospitalization, up to the limit of the policy. The maximum amount is £10,000 for an injury and £20,000 for death.Business interruption insurance
If your business is disrupted by material damage caused by an event such as a flood or fire, business interruption insurance provides you with the financial cover you need to get back on your feet. For example, if a fire destroyed the contents of your business premises, business interruption insurance would cover you are the consequential loss of revenue, as long as your materials are also insured.Business legal protection insurance
Business legal protection insurance - also known as business legal expenses insurance - covers your commercial legal expenses and protects against the potential costs of legal action brought by or against your business.What insurance do I need to start a business?
When setting up your business insurance, you should think about what you need to be covered right now, as well as what you might need going forward.If you don’t have any employees yet, then you won’t need to worry about employers’ liability insurance for now, but if you know you’ll be hiring some very shortly, then you might want to consider adding it onto your policy now.
If you’re not sure about how your business might evolve, don’t worry, you can always add more cover at a later date.
What insurance do I need for a small business?
Small businesses can require many of the same types of insurance as more substantial businesses, but it all depends on the setup of your business.For example, if you’re a one-person band, then you won’t need employers’ liability insurance, but you may still want other aspects of your business to be covered.
Once you’ve thought of what you need your insurance to do for you, then you can choose from the covers above and many others to create a policy that suits your needs.