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What sort of business insurance do I need?

  • Blog
  • 01 November 2016

Business insurance is essential for protecting your company, from the property you own to the products you sell and the services you provide. But with so many types of insurance available, how do you know what sort you need? We’ve listed the key types and what they cover to help you know which is best for your business.

What sort of business insurance do I need?

What kind of business do I have?

When considering insurance, it’s best to first think about what kind of business you have. It’s good to ask yourself questions, like:

  • Am I public facing or do my clients regularly visit my premises?
  • Do I sell products to customers?
  • Do I offer a professional service or offer advice?
  • Do I depend on my property and the tools I use to run my company?

In answering these questions, you can consider the key types of business insurance available. These are:

Employers’ liability insurance

Of all the types of business insurance, this one is essential and legally required in the UK. If your company employs one or more members of staff, even if they work part time, you’re breaking the law if you don’t have this cover.

Employers’ liability insurance covers claims made by your staff when work they carried out resulted in illness or injury. This could include a factory worker cutting their hand while using your machinery, or an office secretary suffering from repetitive strain injury after doing some computer work. Payments you’d have to make, as a result of such claims, can be quite large. This cover will protect you and pay for compensation and additional legal costs that need to be made.  

Public liability insurance

While employers’ liability insurance protects you from staff claims, this covers you for claims made by people outside your company. It’s therefore worth considering this if your business is public facing – whether your customers regularly come into your property, like a high-street shop, or you conduct your work in public, such as a construction firm.

Public liability insurance covers the costs of claims made against you when your business has caused someone an injury, such as a client slipping on a wet floor in your office. It also covers you if your business has caused damage to someone’s property, such as some signage falling onto their car. In the event of such accidents happening, this business insurance would pay for the compensation and legal costs.

Product liability insurance

This cover is concerned with the products you sell. It helps protect you if a customer buys one of your products, which results in them becoming ill or injured. This could range from serving a sandwich in your pub, which gives the buyer food poisoning to a toy you’ve manufactured that injures a child.

If a customer makes a claim against you like this, regarding a product you’ve sold to them, product liability insurance should cover any legal costs and compensation payments you’d need to make.

Professional indemnity insurance

This type of business insurance covers you for claims made concerning the services you provide. This could range from a mistake in some work a client claims you’ve made, through to accusations of infringing copyright and breaching confidentiality. It also covers you for advice you’ve given that causes your client to lose money or suffer an injury.

The insurance is worth considering if your business is a professional service, such as a marketing company or architecture firm, or one that provides advice, like a health consulting firm or financial advisor. If a client makes a claim against you regarding your services, this will cover the compensation payments and legal costs.

Property insurance

This cover protects your business premises – whether you own or lease the space – and the tools you need to do your job. This could include a storm damaging your factory roof, a fire destroying your office computers, or if your stock is stolen.

If you depend on your property and the equipment you use to do your job, this type of business insurance is worth considering. In the event of an incident happening that damages these key assets, property insurance would cover the costs to replace or repair them and help prevent you from suffering financially.

How FSB can help you with insurance advice

Business insurance is a key part of building a company and protecting you and your assets. FSB offers its members top insurance and claims advice from leading experts. This includes providing:

  • The best tailored insurance solutions to suit your business
  • Business cover and claims advice whenever you need it
  • Free business insurance quotations, with no obligation

If you’d like to learn more about how else we can help, read our FSB Insurance Service page, or speak to a member of our qualified team.

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