Business Insurance

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What is business insurance?

Business insurance protects your business against the financial risk of theft and damage to your tools or equipment, claims of poor workmanship or advice, or if you damage a third-party’s property or injure someone. The three main types of business liability insurance cover legal costs and any successful compensation claims made against your business.

A combined business policy may include all these as well as standard property cover for your business.

public liability

Public Liability

Defends claims from members of the public.

professional indemnity.

Professional Indemnity

Covers losses caused by defective work or advice.

employee liability.

Employer's Liability

Defends injury and accident claims made by your employees (staff).

   

What are the different types of business insurance?

Combined business insurance policies can cover your business equipment and stock against loss, damage or theft, and it can also offer cover for employee theft and fraud, property damage and money that’s lost if something prevents you from working (business interruption). But the cost of business insurance is usually driven up by your business liability cover:

  • Employers’ liability insurance: covers your business in case any current or previous employees become injured or sick because of work they did for you - and they then make a claim against your company
  • Public liability insurance: covers your business in case someone outside of your company is injured or their property is damaged because of your business
  • Professional indemnity insurance: covers your business in case a client claims against you for any business or financial losses they experience because of the work you did for them

The type of business insurance you need will depend on the size of your company and the kind of work you do, and you can choose whether to take out combined business insurance or independent liability covers and add on any extra protection you need.

If you work as a trader then you may also need to consider other business insurance types such as business van insurance, specialist tools cover, goods in transit cover and personal accident cover.

Business insurance illustration

Compare business insurance quotes from major UK insurers such as:

Business insurance comparison

You can use a comparison tool to compare business insurance quotes. MoneySuperMarket has teamed up with Simply Business to help you compare personalised business quotes and make sure you’re properly covered.

You’ll need to enter details about the type of company or business you run and its history and the size of your company – including any employees you hire.

You’ll also be able to add any extra levels of cover you need such as business equipment and stock and the cover amount.

And you’ll also need to answer some questions about the nature of the work you do, and any previous claims you’ve made and the likelihood someone might make a claim to help insurers analyse the risk of you needing to claim on your business insurance.

Your business insurance quotes will then be listed by price and you’ll be able to compare based on the amount of cover you need.

Is employers’ liability insurance compulsory?

Employers’ liability insurance is compulsory if you employ people 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.

Is public liability insurance compulsory?

Public liability insurance isn’t compulsory but if your business is likely to come into contact with members of the public and there is a chance that they might make a claim for any injuries or damage to their property that’s caused by your company, then you may want to consider taking out public liability insurance.   

For example, you might have a construction company that works near members of the public and there’s a risk that someone might get injured as they walk by your work or their property might be damaged, and they could then claim against your business.

Or you might own a shop and somebody could come in and be injured and they could then sue you. You might be a tradesman and work in other people’s properties where you then caused some damage. Public liability insurance can help cover the cost of these third party claims.

Some businesses may say they want you to have public liability insurance in place before they’ll agree to work with you.

Is professional indemnity insurance compulsory?

Professional indemnity insurance can be compulsory if you work as a consultant, a contractor/freelancer, a recruiter, a tutor, a personal trainer or a private doctor or nurse.

Professional indemnity insurance can also be compulsory if you work in a recognised profession such as architecture, accountancy, law, or if you provide financial advice or your business is regulated.

Some business customers may say they want you to have professional indemnity insurance in place before they’ll agree to work with you.

Do self-employed people need business insurance?

If you’re a self-employed person that doesn’t employ any workers, then you won’t need to take out employers’ liability insurance. But if you do have any employees – whether they’re permanent, temporary or contractors – then you will need employers’ liability insurance.

If you offer advice or professional specialist services as a self-employed person then you’ll most likely need professional indemnity insurance. And if there’s a risk of someone being injured or their property becoming damaged because of your work then you’ll need to consider getting public liability insurance.

As a self-employed business person you should be able to claim for all your business insurance as an expense.

How much does business insurance cost?

The cost of business insurance varies depending on the level of cover you need and the amount of cover you need to take out. 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.

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