Business insurance

There are many types of business insurance, including:

• Professional indemnity insurance
• Public and products liability insurance
• Employers’ liability insurance
• Product liability insurance
• Personal accident insurance
• Commercial building insurance
• Cyber and data insurance
• Directors’ and officers’ insurance
• Business equipment and office contents insurance
• Tool insurance
• Stock insurance
• Equipment breakdown insurance

If your business employs staff (even part-time or temporary), you’re probably legally required to have employers’ liability insurance. This protects you against compensation claims made by a staff member who has suffered injury, illness or damage as a result of their work.

The Employers’ Liability (Compulsory Insurance) Act 1969 states that employers are responsible for the health and safety of their employees while they are at work. Some businesses are exempt from this legislation. If you’re unsure, you should check the Health and Safety Executive (HSE) guidelines.

While employers’ liability insurance is the only insurance that’s mandatory under UK law, there are other types of insurance, such as professional indemnity insurance, that could be a requirement for your industry. In other words, you wouldn’t be allowed to provide services without cover. You should check with your industry regulator or professional body.

It’s also possible that you’ll need certain types of cover in place before you sign a client contract – your client might have specific requirements relating to insurance and, if they do, you’ll need to make sure that you have the relevant cover in place.

Whether or not you’re actually required to have insurance for your business, you may wish to till consider taking out a policy to cover you in case of any accidents, mistakes, damage, theft and legal fees.

Yes – and it’s a sensible thing to do. A combined business insurance policy is designed to provide insurance cover for multiple liabilities. If you include a wide variety of insurance covers within a single policy, you’ll have only one renewal date – and one document to read.

An insurer should tailor your combined policy to the requirements of your industry and the size of your business – whether you’re a sole trader working from home, the founder of a fast-scaling tech start-up or the director of an agency with multiple offices. You can amend your cover as your business evolves.

The core products in a combined policy usually include:

• public liability insurance – protects you and your business for legal costs arising from claims brought against you by members of the public.

• professional indemnity insurance – covers you and your business if you or an employee make a mistake in delivering a professional service that causes a client to suffer financial or reputational loss.

• employers’ liability – may be a legal requirements for most businesses if you have an employee, whether full time, part time or temporary. It protects you if your employee suffers a work related injury or illness.

• premises and equipment insurance (i.e. buildings and contents).

Depending on your business, a combined insurance policy might also include specialist products, such as cyber and data risk protection.

If you take out a business insurance policy – whether an individual policy or a combined policy – your insurer should tailor the policy to your specific needs.

The price you pay for your insurance (i.e. the premium) will vary according to factors such as the type of business you do, the size of your business, the typical size of your contracts, and the risks your business faces.

Businesses that face higher levels of risk will usually pay higher premiums. Insurers will look at, for example, the potential for accidents, damage and theft as well as legal disputes that could arise from a claim. They will also need to know if you or any of your employees visit client premises or conduct business where the public could be impacted if something went wrong. All these factors have a bearing on the types of insurance products you’ll need – and the level of cover.

When buying insurance – either online or over the phone – you should answer all questions accurately, and choose a high enough level of cover to ensure that you’re protected if you need to make a claim.