If you’re considering business insurance, it’s important to consider the coverage you might require. Almost every business with staff is required to have employers’ liability insurance, public liability insurance is vital if you deal with the public, and professional indemnity insurance is useful if you provide advice.

Is business insurance necessary?

Business insurance protects you against everyday risks associated with your normal business activities. There are many types of insurance that cover mistakes, accidents, theft, damage, and legal fees, but the exact coverage you need depends on the type of business you run.

Can I work from home without business insurance?

If you work from home, you may need business insurance, but what kind of insurance you need will depend on your particular business.

Your public liability insurance should cover you in case a client suffers an injury on your premises.

It may be important to have professional indemnity insurance if you provide advice or a professional service, or if you handle client data or intellectual property

Is business insurance necessary for operating an online business?

Online businesses can encounter distinct risks and obstacles, necessitating insurance tailored to their specific requirements. If you have inventory sold online, stock coverage can safeguard against theft and damage.

Likewise, tool insurance ensures protection for specialised tools crucial to your operations. Conversely, if your business offers online services rather than physical goods, professional indemnity insurance shields you from potential financial liabilities if a client experiences losses due to your services.

Do I need business insurance as a sole trader?

While you may not need employers’ liability insurance, there are other covers you need to consider. If you’re a tradesman, you can set up tradesman insurance.

Wondering about your specific trade?

Insurance by industry list to find the cover that’s right for you.

What insurance is essential for my business?

Consider the nature of your work and the potential risks:

• could your business be liable for compensation due to perceived negligence by a client?
• Is there a risk of injury to the public that could lead to compensation claims?
• Do you have assets like buildings, contents, equipment, or inventory that require coverage?

Here are the primary types of business insurance and the rationale behind why business owners may require them:

Public Liability Insurance

Public liability insurance is vital if your business interacts with the public, whether on your premises or elsewhere. It provides protection against compensation claims for injury or damage filed by clients, customers, suppliers, or other third parties.

Many businesses such as shops, restaurants, hairdressers, builders, and tradesmen opt for this insurance. Review your client contracts to determine if a specific level of public liability insurance is mandated.

Professional indemnity insurance

Professional Indemnity Insurance is crucial if your business provides advice or delivers professional services to other businesses, or handles client data or intellectual property. In the event of errors leading to financial losses for your clients resulting in legal action, professional indemnity insurance can cover compensation claims and associated legal expenses. Certain professional bodies and regulatory entities mandate this insurance for their members, including associations for surveyors, accountants, and architects.

Employers’ liability insurance

If your business has employees, it’s likely a legal requirement to maintain an employers’ liability insurance policy. This policy covers compensation claims filed by employees due to injuries, illnesses, or damages arising from their work. Some businesses, particularly those employing only close family members, may be exempt from this legislation. To confirm if you qualify for an exemption, consult the guidelines provided by the Health and Safety Executive (HSE) or seek professional advice.

Building Insurance for Business

Whether you operate from a home office or have dedicated business premises like a store, office, or pub, prioritising business buildings insurance is essential. If you lease the premises, it’s crucial to verify with your landlord regarding existing coverage.

Contents Insurance for Business

Safeguarding the contents of your business premises, including equipment and tools, is equally important. This coverage reimburses the costs for replacements or repairs in case of damage, loss, or theft.

Stock Insurance

If your business maintains inventory on-site or in storage, stock insurance ensures coverage for replacement costs in the event of damage, loss, or theft.

Product Liability Insurance

Product liability insurance provides protection in cases where a faulty product supplied by your business causes damage to a customer. Even if you didn’t manufacture the product, you may still be held liable for damages.

Personal Accident Insurance

In the event of serious injury or death due to an accident, personal accident insurance offers financial support for lost income, medical expenses, and hospitalization, subject to policy limits, with maximum amounts of £10,000 for injury and £20,000 for death.

Business Interruption Insurance

When material damage from events such as floods or fires disrupts your business operations, business interruption insurance offers financial coverage to help you recover. For instance, if a fire damages your business premises’ contents, this insurance would cover the resulting revenue loss, provided your contents are insured.

Business Legal Protection Insurance

Also known as business legal expenses insurance, this coverage handles commercial legal expenses and shields your business against potential costs associated with legal actions brought by or against your business.

What insurance do I need to start a business

When arranging your business insurance, consider both immediate coverage needs and future requirements. If you currently don’t have any employees, employers’ liability insurance may not be necessary at the moment.

However, if you anticipate hiring staff soon, it’s advisable to include it in your policy now. If you’re uncertain about the future trajectory of your business, there’s no need to worry.

Additional coverage can always be added at a later stage.

What insurance is essential for a small business?

Small businesses may require similar types of insurance as larger ones, but it largely depends on your business structure. For instance, if you’re a sole proprietor, employers’ liability insurance isn’t needed, but other aspects of your business may still require coverage. Once you’ve identified your insurance needs, you can select from various coverage options to tailor a policy that meets your requirements.