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What small business insurance do you need?

A step-by-step guide through the world of small business insurance.

If you’re a small business owner, insurance is a big issue. Compensation claims that large corporations easily swallow or deflect can be fatally damaging for SMEs. This guide briefly explains the most common types of small business insurance, helping you to only purchase what’s absolutely necessary.

Employers’ liability insurance

What is it?

If an employee becomes injured or unwell as a result of their work, this type of insurance protects you if they seek compensation.

Do I need it?

If you have employees, yes.

You’ve probably seen those TV ads in which a voiceover asks, in a booming tone, ‘have you ever been injured at work?’ Well, as the sheer number of those ads suggests, there’s a lot of money in claims like this – and a lot of legal costs too. So, protecting yourself is a no-brainer.

Public liability insurance

What is it?

Public liability insurance protects you against compensation claims from anyone outside your business who’s suffered an injury or damage to their property because of your business.

It could be anything from a trip over a lose wire, to a more serious construction accident.

Do I need it?

It’s not necessarily compulsory, but if your business comes into contact with the general public in any way, it’s a good idea.

Professional indemnity insurance

What is it?

If a client believes they’ve lost money because of sub-standard work or bad advice from your business, they could claim compensation. Professional indemnity insurance protects you against this.

Do I need it?

If you’re a legal, accountancy or financial services business, you probably do. And if you provide consultancy services of any kind, it’s worth learning more about this type of insurance.

Property insurance

What is it?

Property insurance is essentially made up of two parts: building and contents. Building insurance protects you against damage to your premises, while contents insurance protects any equipment within your premises.

You might also come across business interruption insurance, which recovers any money you lose in the event of damage to essential business property.

Do I need it?

You’re not legally obligated to get this type of insurance, but you’re walking a tightrope if you don’t.

The best way of weighing up the merit of property insurance is asking yourself what you’d do if your premises, or equipment, were irreversibly damaged. Could you still trade? If not, it’s worth the investment.

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