What Types of Business of Business Insurance do I Need?
In a nutshell, business insurance is designed to protect you, your business, employees and customers, and your livelihood if something goes wrong.
It can help defend liability claims and pay compensation, and help your business weather the storm if it’s affected by a serious incident like fire or flood. Equally, it can help keep your business moving if its disrupted by things like loss or damage to equipment and vehicles, or even customers who fail to pay.
So, it’s fair to say that it’s very important to have the right business insurance in place – it’s your safety net should the worst happen, despite your best efforts.
But every business is different, so each will face its own set of risks. Clearly, a hairdresser will face different risks to a plumbing business, but even businesses in the same trade, the same street can have different insurance needs depending on exactly what they do, for whom, where and when.
That is why there are so many different types of business insurance, including business insurance required by law. But how do you know which types of businesses insurance you need?
Types of Business Insurance
If you know the risks your business is facing, the first step is to understand what types of business insurance are available and what they cover. In fact, there are many types of business insurance on the market – from packaged policies designed for a wide range of businesses to specialist policies for specific risks like ‘working at height’.
But the most commonly purchased types of businesses insurance are:
- Public liability insurance: This cover is designed for businesses that interact with the public – anyone not associated with the business – or meet clients face-to-face. In essence it is there in case an accident at work sees a client injured or their property damaged. Public liability insurance can help cover the cost of defending legal action and any compensation awarded against your business.
- Employers liability insurance: If your business employs people, this kind of business insurance is required by law. Like public liability cover it is there to help with the cost of defending liability claims and compensation but, as the name suggests, it related to injuries or illness befalling employees while at work.
- Product liability insurance: This type of business insurance provides cover, much like public liability, when a member of the public is injured or their property is damaged. However, it is specifically designed for occasions when such an incident is caused by a product you made, supplied, or repaired.
- Professional indemnity insurance: Not all businesses offer professional advice, but those that do – whether accountants, architects or even plumbers ‒ should take out professional indemnity insurance. This business insurance is there to help protect you if a customer is left with a financial loss as a result of a mistake or because of errors and omissions in your advice.
- Business property coverage: Think of this as home insurance for your business. It is there to help reinstate your business premises after a serious incident like fire or flood, but also to cover essential equipment – from computers to tools – stock, money, and other contents like fixtures and fittings.
- Business interruption insurance: Property insurance will help you get back to normal after a serious incident like fire or flood, but it won’t replace lost income in the meantime. The type of business insurance that can provide this sort of cover is called business interruption insurance. In essence, it steps in to make regular payments for a set period while your business is unable to operate normally following an insured incident.
- Credit risk insurance: If your business offers customers credit – allowing them to pay for products or services after they have received them ‒ this type of business insurance might be for you. It can help protect your finances in the event that some customers fail to pay their bills.
- Cyber insurance: This is a relatively new type of businesses insurance and is designed to help protect against internet-based risks, such as hackers, data breaches, virus and ransomware attacks. Cyber insurance can help cover the related costs – for instance damage to computer hardware and investigation costs – and even help defend your reputation after an attack.
What Types of Business Insurance do you Need? The Bottom Line
So, there are lots of different kinds of business insurance, most of which can also be tailored to meet your exact needs – in terms of the type of cover you take out but also how much, and therefore the overall cost.
The bottom line is this. Finding the most appropriate business insurance you need at the right price is about understanding the risks you face, then securing exactly the right type and level of cover.
That is why we always recommend getting in touch to discuss your needs – because with our expertise and relationships with insurers, we can help you find the right insurance specifically for you.
Quotes from well-known and specialist insurers, including: