What business insurance do I need?

As a small business owner, you’re required to take out certain insurance policies.

While some are compulsory, others can be purchased to further enhance your protection. But with so many to choose from, it can be tough to find out which ones will benefit your business the most.

Here’s a quick guide to the different types of protection you might want to consider:

Employers’ liability

From the moment you take on your first employee, you’ll need to purchase employers’ liability insurance. This protects your staff if they fall ill or are injured while carrying out their work.

You could be fined up to £2,500 per day if you don’t have suitable insurance in place, so it’s essential to take out a policy as soon as you can. Once it’s been purchased, you must display the certificate so your staff can see it.

Professional indemnity

This offers protection against claims made for any damage caused by professional negligence and is particularly useful if you provide a service to business clients or the public.

Even if you feel you’ve done nothing wrong, clients can still claim compensation if they lose money because of a mistake you’ve made, or if your work is late or not up to the required standard. Legal costs and potential compensation could add up to a hefty figure, so it’s a good idea to take out a policy to make sure you’re protected.

Public liability

If a member of the public comes on to your premises, or could be hurt in any way by work your company carries out, you should definitely consider purchasing this type of insurance. Types of claims can range from a simple trip or fall to something a lot more serious, so any compensation could run into thousands.

Public liability insurance will pay for any damages awarded, plus the costs of defending the claim – so it’s well worth getting a policy sorted.

Property insurance

Another thing to consider is how you can protect yourself if your building is damaged or your stock/equipment is destroyed, lost or stolen. If you can’t afford to repair or replace everything yourself, you should definitely take out property insurance.

If you do decide to purchase a policy, make sure that the level of cover you’d receive is greater than or equal to the value of your equipment. Remember to include everything in your valuation, even the office furniture.

This type of insurance will also cover you if you own the building you work from. If the property is damaged by fire, flooding or any other occurrence, having this policy in place will make sure you’re protected.

You should also look into a business interruption policy to work alongside your property insurance. This pays out if you’re unable to work or your property has been damaged, stolen or destroyed.

Industry-specific insurance

If you’re part of a recognised profession, you should check with your industry body what policies they recommend you hold.

Product liability cover

If you make, repair or sell products, you should certainly look into this type of policy. That’s because you’d be protected from any claims made for damage or injury caused by defects.

Fidelity guarantee

This insures against the loss of money or stock if one of your employees is dishonest. However, it’s only cost-effective if you have a large number of workers.

Key person insurance

Although it’s never a nice thing to think about, it’s a good idea to assess what impact a key person becoming ill would have on your business. Whether it’s you as the company owner, somebody who knows your firm inside out, or a major shareholder – it’s probably worth considering how you can limit the damage this will cause.

Want to know more?

We hope this guide has helped shed some light on the different types of insurance on offer. If you’d like more information, our dedicated team of experts is on hand to help.

They’ll ensure you have all the right policies in place to cover your business, so you can be confident that you’re protected if the worst happens. We don’t believe in a one-size-fits-all solution, so we’ll tailor our advice to suit your own personal needs.

To get in touch with our team, please call 08000 149 597 or email info@clearskybusiness.co.uk.

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