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What business insurance do I need?

Insurance Questions Answered: 

I own my own small business, what business insurance should I have?

If you run your own small business, it’s sensible to have the right sort of cover should anything happen to you, your employees, your stock or your premises. You are legally obliged to have some types of insurance – others are optional but make good business sense.

What commercial insurance must I absolutely have?

No matter the size of your business, unless you have no employees you’re legally obliged to have employers' liability insurance, even if your business is home-based. This covers the cost of compensation for employees who are injured or become ill through work.  

If you use vehicles, such as vans or a company car, you’ll also need to have commercial motor insurance. Like domestic motor insurance, this is a legal requirement of having a vehicle on the road.

If your employees are using their own private vehicles for work purposes you are not obliged to pay for their motor insurance, but you are required to ensure that they have the minimum cover required by law. Your employees must tell their insurer that they are using their personal vehicles for work purposes.

If you work in one of these professions, your professional body or regulator will also require you to have professional indemnity insurance.

Great, so what other insurance would you recommend for a small business?

There are several products out there that can help protect you, should you fall ill or be unable to work and that will also help to protect your property, should something happen to damage your business premises and stock, such as a fire or flooding.

As a small business owner you should also consider your legal responsibilities towards your customers and the general public. If members of the public are injured in your shop or your faulty product causes injuries or damage, you could be liable to pay compensation. It is therefore advisable to have liability cover. Find out more about liability insurance here.

Business owners may also want to consider cover for financial risk, for example if customers who owe money for products or services do not pay their debts or pay them later than the payment terms dictate, potentially leaving your business out of pocket. Find out more about trade credit insurance here.

Another type of cover that’s becoming ever more important in keeping modern businesses protected is cyber insurance. This covers losses relating to damage to, or loss of information from, IT systems and networks. The policies can often offer more than just a pay-out following a data breach, and generally include significant assistance with the crisis management of the incident itself. Find out more about cyber risk insurance here.

Find out more about insurance for small business here.

What if I’m self-employed?

You should consider taking out professional indemnity insurance if you offer your knowledge, skills or advice to clients. 

If you use motor vehicles for your business you are legally obliged to have motor insurance.

Since self-employed workers tend to typically be more financially vulnerable that those working for a business, there are other types of cover you may wish to consider that provide income protection should you fall ill, and to help build up a pension for your retirement.

Find out more about business insurance for self-employed workers here.


Last updated 25/01/2019