Public liability insurance
Public liability insurance protects your firm if a member of the public is injured or their property damaged because of your business
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*According to Simply Business data, 10% of customers paid up to £59.19 a year for a standard public liability insurance policy when paying annually, between January 2022 and June 2022. Equivalent to £4.93 per month. Paying monthly is usually more expensive as you'll pay interest.
Business insurance - sometimes referred to as commercial insurance - is a catch-all term for a range of policies that protect your company against financial loss. This could be from damage to your property, theft of your stock or equipment, or legal action either arising from injuries to your staff or members of the public.
The type of insurance you buy will obviously depend on the nature of your business: online retailers' insurance is going to cover different situations to shopkeepers' insurance. Likewise, tradespeople will need very different insurance to a law firm. This makes it hard to work out exactly how much it will cost before you apply.
However, factors that affect the cost of your business insurance quotes include the nature of the work, the number of employees and where the business is based.
Business liability insurance covers your legal costs and for any successful compensation claims made against your business.
There are three main levels of cover:
Public liability insurance protects your firm if a member of the public is injured or their property damaged because of your business
Professional indemnity insurance covers your business if a client makes a claim for any financial losses resulting from work you did for them
Employers’ liability insurance defends your business from work-related sickness, and injury claims made by current or former employees
There is a range of different types of business insurance products that will help you protect the different parts of your business. Here are some of your options:
Business contents insurance will protect the contents of your business's premises if anything is stolen or damaged, including equipment that your business relies on
Business buildings insurance will cover your commercial properties for any unexpected structural damage, such as fire, flood, or vandalism
Product liability insurance will cover you against any costs if a customer takes you to court over one of your products if they cause injury or damage
Business interruption insurance will cover your business while you get back on your feet if an insured event like a fire or flood stops you from trading
Tool insurance will protect the tools that you rely on to do your job. It will cover the replacement or repair of your tools if they are ever lost, damaged, or stolen
Home business insurance is a protection for people who conduct their business from home. It offers special cover where a standard business policy may fall short
Business insurance policies will guard your business equipment and stock against loss, damage or theft, and it can also offer cover for things like property damage and money that's lost if something prevents you from working (aka 'business interruption'). The type of business insurance you need will depend on the size of your company and the kind of work you do. You can choose whether to take out combined business insurance or separate liability covers, and you can add on any extra protection you need.
There are various types of business insurance which cover specific trades, including business van insurance, specialist tools cover, goods in transit cover and personal accident cover.
Business interruption insurance after coronavirus
Newly purchased business interruption policies do not cover claims resulting from events that are already taking place - so business interruption claims related to COVID-19 are unlikely to be successful.
The only form of business insurance that's an absolute legal requirement in the UK is employers' liability insurance - which is necessary for any type of business that employs one or more people - even on a casual basis.
However, various industry regulators oblige businesses to have certain types of insurance to be allowed to operate. For instance, solicitors, accountants and healthcare professionals normally need professional indemnity insurance to operate.
And while other types of business insurance may not be legally required, it is often a good idea to have relevant cover in place, such as stock protection insurance or business van insurance.
"The cost of living crisis means that young and small business owners have shifted a lot of their budget's focus to keeping up with the cost of inflation. However, failing to prioritise insurance protection can be a costly mistake - one that can be a business's downfall. It can be difficult and expensive to recover from the loss of a key person, replace equipment, or cover legal fees, so it's worth it to have the right insurance products in place.
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When you start your search for business insurance, there are a few pieces of information you should have on hand. Providers will ask for this information to give you accurate quotes and determine whether they'll give you the cover you want:
You need to tell you providers about you and your business. This includes your business address, what your business does, and how old it is
As well as details about your business, you may need to provide some personal details as well, such as your name and date of birth
Providers will ask you to disclose how many employees your business has as well as whether they are permanent or temporary contractors
To get a quote, you need to tell us what kind of policy you're looking for an how much cover you want. You need to also disclose any preferred optional extras
Depending on the type of business insurance, you may need to give more specific details, such as your content value or key person details
You may need to provide honest information about any of your business's past or ongoing claims and legal disputes
When it comes to insurance, it's worthwhile to find policies that offer great value cover as opposed to cover at the lowest cost. The cost of business insurance will depend on a number of different factors, including:
Different business insurance types are all differently priced, so it's worth it to consider your options
Different industries and professions face different risks, which will affect the cost of insurance
Having more employees or a greater annual turnover will usually make insurance more expensive
The more policies you have or the more your insurance covers, the higher your premiums will be
Having a history of insurance claims or facing legal action can make insurance more expensive
Volunteering to contribute to the cost of claims could help you save money on your business insurance
Comparing business insurance quotes with MoneySuperMarket is the easiest way to find an affordable deal on cover. Here's how it works:
Let us know about your business and what it does, and we'll find deals tailored to your requirements
You'll be able to compare your offers by cost, level of protection and any extras that are available
Once you've found the right deal for you, just click through to the provider to finalise your purchase
Employers' liability insurance is compulsory if you employ anyone, and your business could face a fine of £2,500 for every day you aren't properly insured.
The Employers' Liability (Compulsory Insurance) Act 1969 was put in place to make sure businesses take out at least the minimum level of protection of £5m from an authorised insurer to help them pay any compensation costs if an employee is injured or becomes sick because of work.
Unlike employer's liability insurance, public liability insurance isn't a legal requirement. That said, it's an important cover for any business that interacts with the public - as circumstances in which you may end up needing it are fairly common.
Professional indemnity insurance is not usually compulsory by law. However, it's mandatory for members of certain professional bodies, and required by regulators in some industries, making it effectively compulsory for solicitors, financial advisors, accountants, architects and certain healthcare professionals, among others.
Some business customers may want you to have professional indemnity insurance in place before they'll work with you.
If you're self-employed and don't employ anyone, you won't need employers' liability insurance. If you do have employees - whether they're permanent, temporary or contractors - you need employers' liability insurance.
If you offer advice or professional specialist services as a self-employed person, you'll most likely need professional indemnity insurance. And if there's a risk of someone being injured or their property getting damaged because of your work, you'll need to consider public liability insurance.
As a self-employed business person you should be able to claim for all your business insurance as an expense.
The cost of business insurance depends on your business activities; manual labour and dangerous work will cost more to insure than insurance for offices.You can also choose to add extra cover such as legal expenses, business and office equipment, and personal accident.
Comparing business insurance quotes can help you get a better idea of how much business insurance will cost for you and your company.
Even predominantly online businesses can benefit from business insurance policies. You'll need employers' liability insurance as usual if you have employees, but you could otherwise benefit from policies which insure your stock and your premises, and which cover any legal fees that may arise. Simply Business offers online retailer insurance that's specifically tailored towards e-commerce firms.
Certain businesses require trade licenses, including market traders, taxi drivers and pet shops. If your business requires a license, you can buy business insurance without it. Your insurer may not pay out, however, if you start trading and have to make an insurance claim before your trade license is in place.
Not every business needs to be registered - especially if you set up as a sole trader. If you start a limited company, however, paperwork is involved and you will need to register (or 'incorporate') with Companies House.
You can indeed buy business insurance before registering your business, and before you've started trading. You won't usually be asked for any business registration details when you buy your business insurance.
You do have to notify insurers of County Court Judgements or Individual Voluntary Arrangements on your record. Many insurers may well decline your application at this point, but luckily there are certain insurers who specialise in covering people with this sort of thing on their record. Your policy may be more expensive, however.
There are many types of theft that can befall to a business, and they are often quite different. There's no one business insurance policy you can buy that covers all kinds of theft, but you will more than likely be able to buy a policy relevant to your business that covers the types of theft that are mostly likely to affect you.
Product liability insurance provides an additional layer of protection as part of the public liability cover. It covers claims against your business for an injury or illness caused by your products; whether your company designed, manufactured or sold the product, you’re protected against any costs. This can be particularly useful for retail or technology businesses.
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