Business Insurance Setup
The right insurance protects your business from the kind of unexpected events that could otherwise wipe you out financially. Most small businesses need at least one or two policies, and some are legally required. This pathway helps you understand what cover you need, what it costs, and how to get it.
Public Liability Insurance covers you if a member of the public or a client is injured, or their property is damaged, as a result of your business activities. For example, if a client trips over your equipment at their premises, or if you accidentally damage a client's property while working. It is not legally required for most businesses, but many clients and venues will insist on it. Cover typically starts from around £5 per month.
Professional Indemnity Insurance covers claims arising from your professional advice, services or designs. If a client suffers a financial loss because of a mistake you made or advice you gave, they could sue you. This policy covers your legal costs and any compensation. It is essential for consultants, designers, accountants, marketers, IT professionals and anyone who provides professional advice or services.
Employers Liability Insurance is legally required if you have employees (including part-time and temporary staff). It covers claims from employees who are injured or become ill as a result of their work. The minimum cover required by law is £5 million. Fines for not having it can reach £2,500 per day.
Product Liability Insurance covers claims arising from products you sell, supply or manufacture. If a product you sell causes injury or damage, this policy covers the legal costs and compensation. It is often included within a Public Liability policy.
Good to know
- Get quotes from at least three insurers — prices vary significantly
- Check what your clients require before buying — some specify minimum cover levels in their contracts
- Consider a combined business insurance policy that bundles multiple covers together
Watch out for
- Assuming your home insurance covers business activities — it almost certainly does not
- Underinsuring to save money — the whole point of insurance is to cover the worst case
- Not reading the policy exclusions carefully
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