When you run your own business, there are various types of business insurance available that are designed to protect you and your business. Some types of business insurance are a requirement for your business, while others are optional, and having the correct ones in place for your business can help you to avoid costly expenses should something go wrong.
Whether you are a new business owner or a seasoned entrepreneur, knowing which types of insurance you need can be confusing. The types of business insurance that you and your business require will depend on the nature of your business. This guide covers the most popular types of business insurance and some expert tips to help you know which business insurances will help to protect you.
Public Liability Insurance
Public liability insurance is designed to protect your business from claims for compensation from people outside your business that have had their property damaged or suffered an injury because of your company. For example, if you are a shop owner and a customer slips over in your store and is injured, they may claim for compensation.
This type of business insurance is also essential for covering more serious claims such as construction accidents which can cause serious damage to buildings or injuries to individuals. Public liability insurance will pay for the compensation as well as any legal costs that arise from accidents.
If your business involves being in contact with members of the public, either on your own business premises, or their own homes, you should consider having public liability insurance to protect yourself.
The cost of public liability insurance will vary greatly depending on the size of your business, the industry you are in, and the amount of cover you want to have. When choosing public liability insurance for your business, be sure to shop around to find the best deal.
Employer’s Liability Insurance
Any business that has employees must have employer’s liability insurance, even if employees are just part-time or on a short-term basis. This is a legal requirement for all businesses in the UK, and if you do not have employer’s liability insurance but have employees, then you are breaking the law. This type of cover will protect you, and your business should an employee fall ill or get injured because of their work.
If an employee is injured because of their employment at your business, they may seek to claim compensation from you. Depending on the type of injury or illness that has occurred, this compensation amount could be a lot of money, and having employer’s liability insurance means your insurance company will cover the cost. As well as paying the compensation claim, your insurance company will also cover any legal costs you may incur defending the claim.
Employer’s liability insurance is a legal requirement for any businesses in the UK that have any type of employees. This includes part-time employees, full-time employees, self-employed contract workers, temporary staff, volunteers and apprentices.
Business Property Insurance
Business property insurance covers all of the things that make your business tick, such as your computers, tools, machines, stock and building. No business can operate without the tools of their trade or without access to their business place of work.
Should something happen to your business building or equipment, you might have to pay out a lot to cover the costs. Business property insurance provides cover for all of these things and would cover the costs of tools, equipment or even places need to be repaired or replaced.
When buying business property insurance, you should make sure that the sum insured on your contents list accurately reflects the value of your business equipment. If you own the building that your business operates from then, you also need to ensure that is adequately insured.
Think about everything within your business, including the mundane things like filing cabinets and chairs, as if you are under-insured you will not receive the full value of your items back should you need to claim.
Professional Indemnity Insurance
Any businesses that offer knowledge, skills or advice as part of their service should consider having professional indemnity insurance. This type of business insurance will cover you if your work results in a customer’s damaged reputation or loss of sales, and they seek legal action.
If a customer of yours ends up losing money because of a mistake you have made in your work, then they could claim for compensation. Professional indemnity insurance will cover the costs of any compensation and legal costs involved.
Professional indemnity insurance is not a legal requirement but is worth considering for businesses that are selling knowledge or expertise to their customers. This could be in the form of an advisory or consultancy service, or a design or creative service.