Business insurance can provide peace of mind so that if something were to go wrong your company can continue to operate. We explain the different policies and which type you might need.
What is business insurance?
Business insurance is a broad term. It refers to various insurance policies which aim to protect your business from financial loss if something goes wrong. This could include protection for your premises if it were to be damaged in a fire to funding legal protection if one of your employees injures themselves while working.
As with other forms of insurance, to remain covered over a set period you’ll need to pay a premium.
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What type of business insurance do I need?
Business insurance is usually personalised. A construction company, for example, might prioritise protection for their high-value tools and equipment from damage or theft while a start-up tech company might want to protect their information from a cyber breach.
In addition, companies of varying size also require different levels of insurance. For instance, an established business with an office might want their policy to cover their furniture. Meanwhile, a rival start-up working remotely might prefer to use this money elsewhere.
So, to help you identify which policies might be best for you, we’ve briefly listed and explained the types of business insurance below.
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Public liability insurance
Public liability insurance is used to cover potential legal expenses or settlement if someone experiences injury or harm on your business premises.
For example, you own a small store and a visiting customer falls over a box and damages their arm. In the aftermath, they decide to seek compensation from your business. In this scenario public liability insurance will ensure you won’t incur any financial losses over the incident, whether it be legal expenses for challenging the claim to the actual payout.
Professional indemnity insurance
Professional indemnity insurance works similarly to public liability insurance. It protects your business from legal expenses or settlement claims if your clients incur some sort of damage from your own negligence.
This could be, for example, if you’re a tech repair business and while fixing a client’s computer you forgot to back up their data. If the client then claimed against your company for damages your business should be protected from any potential losses.
Employer’s liability cover
While the above two policies offer protection from clients, employer’s liability cover offers insurance for damage to your employees.
For example, if you own a construction company and one of your employees is injured on the job then employer’s liability insurance will cover any claims made against your business.
Business car insurance
If your business relies on its own transport, then it’ll need business car insurance. This works similarly to a standard car insurance policy, with this type of cover offering protection against third party damages, fire and theft.
It’s also known as commercial vehicle insurance, which can be fairly flexible. For example, if you’re a small logistics company which owns a fleet of vans you can insure them all under one policy.
Commercial property insurance
Like a residential property, you can insure your business’s premises against damage. This comes under commercial property insurance, which is broken up into commercial buildings and contents insurance.
Buildings insurance will protect your property from any damages while contents insurance will protect the items within the buildings.
Cyber-risk insurance
According to statistics from the Office for National Statistics (ONS), the UK’s e-commerce revenue amounted to £105 billion in 2022 and is expected to grow by nearly 47% by 2027. It’s an area which is driving interest and causing some people to consider a new form of insurance.
Cyber-risk insurance covers any losses your business may experience from IT systems or networks. This could be, for example, a tech start-up which falls victim to a cyber breach and has its data stolen. Any money it loses will be covered by this insurance policy.
Keyman insurance
No matter the size of your business, you’ll probably have an integral employee. As a result, if they were to fall ill and take time off work your revenue might feel the effects of their absence. This is where keyman insurance comes in, protecting businesses from financial loss due to the absence of an employee.
Some keyman insurance policies also pay out if this employee dies, paying out a lump sum in these scenarios. This can be used to balance the books at the end of the month or hire a replacement.
Landlord insurance
Landlords face a set of unique risks. From defaulting tenants to damaged rental homes, landlord insurance protects your income from potential shortfalls.
So taking out a comprehensive landlord insurance can cover you for all these concerns under a single policy.
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