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Business insurance

Whether you run a small business, a large multinational company or are self-employed, business insurance can help to protect you and your company against unexpected costs.

Why do I need business insurance?

Business insurance can help protect business owners and independent professionals against everyday risks, such as mistakes, stock or premises damage, and legal costs (known as Liability insurance). Some policies can even protect against business interruption and supply chain breakdown.

This protection means that, should your business suffer an unforeseen knockback, you can feel confident that you and your employees are protected. Meanwhile, your insurer can help to get your business back up and running again quickly.

Business insurance can also offer credibility to your business, demonstrating to prospective customers and potential employees that you are trustworthy to do business with.

What type of business insurance do I need?

Some types of business insurance are required by law:

  • if you are an employer you 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 legally obliged to have commercial motor insurance
  • Some professions are required to have professional indemnity insurance by their professional bodies or regulators

Other types of business insurance are optional, such as:

  • Commercial property insurance, which covers the cost of repairing or rebuilding your business premises, or replacing your stock or equipment.
  • Liability insurance, which covers the cost of compensation claims following fault or negligence brought against you or your business by clients, customers, shareholders, investors, or members of the public.
  • Cyber insurance, which covers you for losses relating to damage to, or loss of information from, IT systems and networks.

Do I need business insurance to work from home?

Though it’s not a requirement to have business insurance when working from home, there are some different types of insurance that it might be worth considering.

If you work from home regularly, you should think about your home insurance. Working from home doesn’t necessarily mean that you need to take out different cover, but you need to make sure that your insurer understands your situation.

For example, if you store stock or expensive equipment in your home, it should be covered against theft or damage. If you offer online services or handle client data, you might want to consider professional indemnity insurance. If you have clients visit your home for meetings, public liability insurance will offer protection should they have an accident or suffer an injury while on your premises.

Remember, if you are running a business rather than just working from home, you will need to have the appropriate commercial property insurance.

What if I run a business from my home?

How do I buy business insurance?

Business insurance is usually sold as a package, combining a number of different policies under one premium. 

The types of policies you need, and the cost of your premium, will be based on a number of factors including:

  • the nature of your business
  • its annual turnover
  • the number of people you employ 
  • your insurance claims history

You can buy business insurance directly from an insurer, or from a specialist broker through the British Insurance Brokers’ Association (BIBA).

For more information see the ABI guide on insurance for your small business (pdf 76kB).