Insurance is a way of protecting us from financial risk, an insurance company will weigh up all of the risks involved, including the potential financial losses that they will be covering and determine a premium for the insurance needed, but what business insurance will you need?

As well as thinking of business insurance. you will also need to think of any possible impact on personal insurance. You should notify your car insurance provider if you will use this for business use in any way and your home insurer if you will carry out any work from home, even administrative or storing of stock of equipment. You should also review any income protection policies you may have, to reassess that any cover remains sufficient and to confirm that your policy covers your employment status.

When deciding what business insurance you will need, it is important to think what could go wrong, the consequences of this and the financial impact on your business. This will largely be dependent on the activities that your business will be carrying out.

Your trading structure should also be considered to ensure that you have correctly identified who needs the cover. If you are a sole trader you and your business are one and the same; as a limited company, a separate entity is created

Some common types of cover available are:

  • Public Liability Insurance provides protection in the event that the activities of your business cause another person any loss, whether this be damage to their property or injury to their person
  • Professional Indemnity Insurance provides protection in the event that the advice or skills that your business offers causes another business or person some kind of loss
  • Product Liability Insurance provides protection in the event that a product you sell causes another business or person some kind of loss
  • Employers’ Liability Insurance is a legal requirement if you employ people other than direct family members. This insurance provides protection in the event that an employee is injured or becomes ill during the course of their work.
  • Business Property Insurance is available for both buildings that your business may own as well as contents such as stock or equipment
  • Business Motor Insurance may be needed if your business owns vehicles or provides company cars to staff.

There are also types of insurance available that can protect your business in the event that operations are impacted, such as:

  • Business Interruption Insurance provides protection if your business is unable to operate temporarily due to some unforeseen event, if crucial equipment broke down or a main supplier let you down for example
  • Cyber Insurance provides protection in digital era against things such as a malicious hack on your business systems, data breaches and corruption of electronic systems
  • KeyMan or Key Person Insurance is available to protect your business in the event that someone who is fundamental to the business operations is unable to work or dies

It can be really overwhelming trying to navigate the insurance/s you may require, ensuring that the cover is adequate for your business operations and that you are paying a competitive premium for your policy. Let’s face it, insurance can be confusing and hard to understand and it can be a good idea to look for providers who specialise in the area that your business operates in as they will have a good understanding of the risks your business will be faced. If your industry has a trade association or professional body, insurance providers recommended by them can be a good place to start to ensure you pay only for the cover you need whilst adequately protecting your business.

Remember to keep your documents relating to your insurance in a safe and easily accessible place

You should also keep records of costs paid for insurance premiums for your business accounts, costs incurred exclusively and wholly for business use means that any insurance where your business is the beneficiary is likely to be an allowable expense

“Quality means doing it right when no one is looking.” 

Henry Ford, founder of the Ford Motor Company