Insurance for small businesses

First of all, no matter the size of your business, all employers are legally obliged to have employers’ liability insurance to cover the cost of compensating employees who are injured or become ill through work.

If your business uses vehicles, you are also your legally obliged to have commercial motor insurance.

SMEs can be especially vulnerable against potential risks and unforeseen events, which is why there are specific insurance policies that some small business owners may want to consider, depending on the type of business it is.

Protect yourself against the risk of compensation claims and legal action

You have legal responsibilities towards your customers and the general public. If members of the public are injured, you could be liable to pay compensation if you or your employees have done something wrong, failed to do something you should have, or broken the law.

Public liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business. This could mean someone who fell and hurt themselves while in your shop, or if property was damaged at an event off-site organised by your business.

Professional indemnity insurance covers the cost of compensating clients for loss or damage resulting from negligent services or advice provided by a business or an individual. Some professions are required to have PII by their regulators (see which ones here), while many companies choose to have it. PII is especially useful for companies who:

• Offer advice and provide consultancy
• Offer an expert service, such as designs or calculations
• Hold client information and data

Product liability insurance covers the cost of compensating anyone who is injured by a faulty product that your business designs, manufactures or supplies.

Protect your property

Buildings and their contents are essential to any business. Insurance provides financial protection when your property is damaged through events like burglary, fire or flooding. In addition, Business Interruption Insurance will cover you for any periods when you cannot do business as normal because of damage to your property. 

• Buildings insurance pays for damage to your business buildings caused by fire, lightning and flooding.
• Contents insurance pays for damage to, and theft of, stock and business equipment.
• Business interruption insurance covers you for loss of income during periods when you cannot carry out business as usual due to an unexpected event. 

Protect yourself against financial risk

Some insurance products provide a safety net for financial risks, such as customers with bad debts or untrustworthy employees.

Trade credit insurance provides cover for businesses if customers who owe money for products or services do not pay their debts, or pay them later than the payment terms dictate.

Money insurance replaces stolen money belonging to your business, whether from your premises or in transit.

Key person insurance protects your business against losing income when a person in an important position dies or becomes disabled.

Employee dishonesty insurance protects your business against your employees stealing money or stock.

Protect your employees

Employees are an invaluable asset to every business, and there are various insurance products that will help provide financial security and medical assistance for you and your employees in the event of illness. In addition to compulsory employers’ liability insurance, you may want to consider the following products:

Income protection insurance will pay a monthly income to employees who are unable to work due to illness, injury and / or suffer a reduction in salary for a prolonged period.

Private medical insurance covers the cost of private medical care for your employees, allowing them to receive treatment quickly and minimising disruption to your business.

Health cash plans can cover your employees’ fees for eye tests, dental care and physiotherapy.