Running a small business comes with plenty of responsibilities already on your plate, and making sure you’ve got the right insurance is just another one of those tasks that needs to be done.
Insurance plays a vital role in safeguarding your business against unforeseen events that might otherwise lead to significant financial issues or even cause your business to close. The insurance your business needs will vary hugely depending on the scope and size of your operations and the specific risks involved. Some levels of insurance are legally required in the UK, and some are simply very advisable according to the business you run.
This guide will examine the main types of insurance policies small business owners should consider, to understand what each policy covers and why it might be necessary for your operation – allowing you to focus on your business with peace of mind that you’re protected against liabilities.
Employers’ Liability Insurance
Legally in the UK, any business which employs other people, apart from the business owner, must have employers’ liability insurance. This covers your business if one of your employees claims they’ve suffered an injury or illness as a result of their work.
The insurance will cover all legal and compensation costs involved, including medical expenses, loss of income and rehabilitation costs. If you employ people and don’t have employers’ liability cover, then the Health and Safety Executive (HSE) can fine your business £2,500 for every day you are uncovered. Having this insurance protects not only your employees but also shields your business from potentially crippling consequences in the event of a claim.
Public Liability Insurance
Whilst not a legal requirement, public liability insurance is essential for any business which interacts with the public, through clients visiting your premises or if your business operates in public spaces. Public liability insurance will cover claims made by any third party for injury or damage caused by your business activities.
While it isn’t a legal requirement, many clients and other contractors expect your business will be covered by this type of insurance, and they may refuse to work with you if you’re not covered by it. Having public liability insurance will give you peace of mind that your business is protected against severe financial strain if an unexpected incident occurs.
Contents and Portable Equipment Cover
Most businesses rely on physical assets such as office equipment, computers, tools and other portable equipment for their daily operations. This type of insurance will protect against theft, loss or damage meaning these essential items can quickly be repaired or replaced to allow business to continue to function. Contents and portable equipment insurance is especially vital for businesses that rely heavily on specific tools or technology to operate and will minimise downtime and financial loss.
Professional Indemnity Insurance
If your small business involves any advice, consultancy or professional services to clients then this insurance will cover legal costs and compensation that will arise if someone claims your professional services or advice caused them financial loss due to negligence, error or omission. Whilst small businesses in certain professions, such as legal and financial advisors are legally required to have professional indemnity insurance, other businesses would be well advised to consider it.
A small business selling second-hand vehicles and offering finance deals or if your services on a vehicle cause damage that leads them to lose out financially, you might find yourself out of pocket in the event of a claim.
Cyber Liability Insurance
As businesses rely more heavily on digital platforms and online operations, the increased risks of cyberattacks and data breaches are something that can cost a small business dearly financially. Cyber liability insurance can help to protect small businesses from these types of incidents and any other cybercrime.
The insurance will cover any costs associated with responding to a cyberattack - from legal fees, notification costs and compensation, and may also cover losses owing to the interruption to business as well as the costs of restoring data and systems.
Find the Right Insurance for Your Small Business
It can seem bewildering to try and figure out which insurance policies are right for your small business, and no one wants to be paying for ones you don’t need. Other policies might also seem to be appropriate for your business, such as business interruption, property insurance, product liability and goods in transit. For many small businesses, the best solution is commercial combined insurance which can cover a wide range of risks, offering the best protection rather than multiple policies that will cost your company more money.
For the simplest way to figure out what policies you need, why not get in touch with the expert team at Prime Cover who will help you work out the exact policies you need for your unique business? They can offer you a free, no-obligation quote tailored to your insurance needs.