Every business in the UK has an obligation to ensure it carries the necessary insurance. That’s not just to protect your business, but also to protect your employees, suppliers and the public. Understanding what kind of insurance you must have is one thing; it is also worth getting a sense of the types of insurance you might consider taking out to protect both your business and yourself.
In short, insurance is there to cover you against mistakes, accidents, theft, damage and legal fees, but it’s important to remember the exact cover you need depends on the business you run and how you run it. For instance, if you welcome clients onto your premises, then you should consider public liability insurance, in case a client suffers an injury while visiting you. Similarly, if you offer advice or a professional service, or if you handle client data or intellectual property, then professional indemnity insurance could be important.
The main question you must ask yourself is simple: What type of insurance does my business I need?
Think about the kind of work you do and the risks you need to cover: could your business face a compensation claim from a disgruntled client because they believe you’ve been negligent? Is there a chance a member of the public could be injured by your business and claim compensation? Do you have buildings, contents, business equipment, or stock to insure?
The following is a list of the main types of business insurance – why it’s useful, what it covers, and whether you need to have it as a mandatory part of running your business properly.
Public liability insurance is a key consideration if your business comes into contact with members of the public, whether that’s at your premises or elsewhere. It can protect you against compensation claims for injury or damage made by clients, customers, suppliers, or other third parties. Check your client contracts to see if a particular level of public liability insurance is required.
Professional indemnity insurance is important if your business gives advice or offers a professional service to other businesses, or if you deal with client data or intellectual property. If you make a mistake in your work and your client loses money and sues you, your professional indemnity insurance can cover the compensation claims and legal costs. Some professional bodies and regulators require their members to have this insurance, including bodies for surveyors, accountants, and architects.
If your business employs staff, you’re probably legally required to have an employers’ liability insurance policy. This covers compensation claims made by a member of staff because they’ve suffered injury, illness or damage as a result of their work. Certain companies are exempt from the legislation, including some businesses that only employ close family members. We have a handy explainer available in case this insurance applies to you
- Commercial property insurance
Whether you work from home or have separate business premises such as a shop, office, or pub, business buildings insurance should be a priority. If you rent the premises, make sure to check with your landlord to see what’s already covered.
You can also protect the contents of your business premises, your business equipment and tools. If these are damaged, destroyed, lost or stolen, this cover will pay the cost of replacements or repairs.
If you hold any stock, whether on your premises or in storage, stock insurance will cover the cost of replacing it if it’s damaged, destroyed or stolen.
Product liability insurance protects you should a customer of yours suffer damage as a result of a faulty product you provide. You may be held liable for damage even if you didn’t manufacture the product.
Trade credit insurance provides cover against the risk of businesses not being paid for goods or services that they sell, whilst also giving businesses access to detailed information and guidance on all aspects of trade from industry experts
If your business is disrupted by material damage caused by an event such as a flood or fire, business interruption insurance provides you with the financial cover you need to get back on your feet. For example, if a fire destroyed the contents of your business premises, business interruption insurance would cover your the consequential loss of revenue, as long as your contents are also insured.
At Paul Beare we don’t just help you with the basics. Alongside delivering a full suite of accounting services, we work closely with Wingate Benefit Solutions to make sure our clients have the right cover in place for their business. They are able to undertake a review to look at how your current arrangements comply with current legislation, whether there are any potential gaps/liabilities in cover, how the current arrangements align themselves to your contractual commitments, what improvements can be made to any cover in place and whether you are getting value for money in terms of the premiums that you pay.