Business Insurance

Business insurance is purchased to protect a business from incurring heavy payments if an unfortunate event should arise.

Do I need business insurance?

There is a variety of business insurance available, some types of insurance are optional and others are mandatory. If you have employees, you are legally obliged to take out employers’ liability insurance that covers at least £5 million. This type of insurance is designed to protect the business if an employee becomes unwell as a result of working at your company.

Other business insurance like public liability insurance and property insurance are not legally required, but they can be very valuable as they protect your business if someone outside of your business makes a claim for compensation or if your property is damaged or stolen.

Business insurance means that it is less stressful and expensive for you if something goes wrong. In addition, it demonstrates that you are a responsible business as it shows that you take your company and the welfare of your stakeholders seriously.

There are a number of different types of business insurance available. The most common types are:

  • Employers’ liability insurance is a legal requirement, if you have employees. This insurance protects you from the costs you may incur if one of your employees becomes injured or unwell as a result of the job and consequently seeks compensation. You must have employers’ liability insurance that will cover at least £5 million.

  • Public liability insurance protects you from claims made by people external to the business for property damage or injury.

  • Professional indemnity insurance is a type of insurance that is especially important for those in the consultancy industry. It protects you against claims made by clients who have experienced financial loss as a result of a mistake made by your business.

  • Property insurance is really important for any business and is incremental in contingency planning. Should something unfortunate happen to your property like a fire or theft, this insurance can help you cover the costs.

If you look around, you can find a number of bespoke insurance policies that are tailored to the specialist needs of specific business. Such polices include ones designed for especially for builders, landlords and caterers. It is also possible to get insurance for e-risks such as hackers and viruses.

Where to buy business insurance

There are a number of companies that provide business insurance and most business insurance can be bought on the internet or over the telephone. The quickest and easiest way to look for a provider is to use a price comparison website. On these websites you can not only compare the cost of business insurance, but also the level of cover and conditions of each provider. This will give you a clearer idea of what insurance provider is best for your business.

Top UK business insurance providers:

  • Hiscox specialise in business insurance for SME (small to medium businesses). As well as providing general business insurance policies such as employers’ liability insurance and professional indemnity insurance, they also offer more specialist insurance like e-risks insurance that aims to insure a business against electronic ID theft and viruses.
  • Morethan is one of the UK’s leading business insurance providers. They offer a range of industry specific insurance policies such as hair and beauty insurance and hotel insurance
  • Zurich is another popular choice for those wishing to take out business insurance. Their broad range of policies includes marine cargo insurance and reputation protection

Tips for choosing business insurance

  • It is tempting to be conservative about the value of your property when you are looking to take out business property insurance as this will often lower the costs of your insurance premium. However, in the long run it is actually better to overestimate the value of your property. This way you are better prepared if something unfortunate arises.
  • When you are reading up on your potential business insurance provider, it is a good idea to take a look at some of their customer reviews. While these reviews are not necessarily representative of total customer experience, they can give you an indication of the quality of the services offered by the insurance company.
  • If you can reduce your risk, you are likely to enjoy a cheaper premium. This can be achieved by taking preventative measures such as installing a burglar alarm or locating your business in an area with a lower crime rate.
  • It is important that you do your research. Take advantage of price comparison websites and make sure that you are getting the best price and coverage for your business.
  • Know your policy! Make sure you know what your policy does and does not cover. This will protect you from any nasty surprises if you have to make a claim. If you are ever uncertain, refer to your policy documents or contact your provider directly.

Comparison Table

Business insurance varies considerably according to the type of cover that you want and the situation of your business. The table below is designed to give you an idea of the type of cover some of the leading insurers provide.

Provider Public Liability Insurance Professional Indemnity Insurance Employers' Liability Insurance
Morethan Up to £2 Million Up to £5 Million Up to £2 Million
Hiscox Up to £10 Million Up to £10 Million Up to £10 Million
Simply Up to £10 Million Up to £5 Million Up to £10 Million
AXA Up to £10 Million Up to £5 Million Up to £10 Million