Types of Business Insurance

When running your own business you will need to think about getting the appropriate level of business insurance.

There are many different types of business insurance and so you’ll need to spend a little time becoming familiar with the options so you can choose the best ones for your company.

However, there are a number of ‘core’ types of business insurance that will cover the vast majority of businesses.

These are detailed below, however it should not be used as a comprehensive list as there may be other types of insurance needed that are specific to your business or industry.

Public Liability Insurance

One of the most common types of business insurance, Public Liability (PL) basically covers you and your employees for any injury or damage they cause to an external party. This usually covers you both on your own business premises and when out and about.

This type of insurance is vital if your business has premises that your customers or members of the public may visit since it will protect you against claims for any accidents that occur. However, even if you do not have business premises but are going out meeting clients, you should strongly consider public liability insurance.

Professional Indemnity Insurance

Types of Business Insurance - Professional LiabilityProfessional Indemnity (PI) insurance is mainly designed for businesses that provide services to other businesses.

So this would cover companies such as consultants, accountants, utility providers, etc.

It will also apply if you handle data that belongs to your clients or are responsible for their intellectual property (IP).

Professional Indemnity insurance comes in to play if a customer feels they are at a loss due to the advice or service you have provided and wish to claim the cost of the loss back from you. This therefore makes it vital for most B2B businesses.

Product Liability Insurance

This type of business insurance will be necessary if you manufacture or sell physical products either to other businesses or the general public.It covers you against any loss or damage that your product may cause to individuals or their property.

It’s a common misconception that if you do not manufacture the product then you do not need Product Liability insurance as the manufacturer is responsible for the safety of the product. However, the reality is that if your business name is on the product, if you have repaired or made changes to the product, or if you imported it from outside of the EU, you are responsible and would be strongly advised to take out Product Liability insurance.

Employers Liability Insurance

Types of Business Insurance - Employers LiabilityIf you are employing any members of staff then Employers Liability (EL) insurance is one of the types of business insurance you will certainly need as it is a legal requirement.

This insurance covers you for any injury or damage to property that your employees experience whilst working for you.

In most cases you will need a minimum cover level of at least £5m to avoid receiving a hefty fine.

Even if you do not employ anyone but have voluntary or self-employed staff, this is one of the types of business insurance you may need.

Buildings & Content Insurance

Whilst Buildings Insurance may only be relevant if you own your business premises, Content Insurance can be applicable even for businesses without any physical premises at all.

If you have stock or equipment that is owned by the business then you will need content insurance. This even applies if your stock is being held at a 3rd part location since many fulfilment centres and storage facilities do not cover your stock against damage or theft.

You should also be aware that if you work from home, your personal home contents insurance is unlikely to cover anything that is owned by the business rather than you personally. This means that the vast majority of businesses will need some form of buildings or contents insurance for business.

Getting Covered for Types of Business Insurance

Types of Business Insurance BrokerWe have covered the main types of business insurance you need to consider above, however, there may be others your company needs and so it’s important to do your own research too.

It’s good practice to consult with a solicitor who can advise on your legal risks and obligations to help you ensure you are fully covered for all eventualities.

Of course, with the exception of some types of business insurance, getting business insurance cover is mostly optional. You can decide not to take it if you are prepared for the risk it leaves you with.

In order to get your business covered we would recommend consulting with a business insurance broker such as QuoteZone who can compare the different policies available in order to find the best deal for your business.

In addition to getting the right types of business insurance in place, you should also look in to whether you will need to register for the anti-money laundering regulations.