Business insurance guide

What business insurance do I need?

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Business insurance can be extremely useful for all kinds of businesses, whether you’re a restaurateur with a shopfront or an entrepreneur working in an office block – here’s what you need know

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What is business insurance?

Business insurance protects your company against a range of issues which could arise during the course of running your company. It can be useful in a variety of circumstances, no matter what type of business you run.

Do I need business insurance?

If your business employs people you are legally required to buy employers’ liability insurance. You’ll also need commercial motor cover if your business uses vehicles such as delivery vans or motorbikes.

You might also find that if you’re taking out a mortgage on your business premises, your lender will only agree to the loan if you have business buildings insurance.

What does business insurance cover?

The coverage you’ll get with business insurance will depend on two factors:

  • The type of policy you take out
  • The level of cover you add

What types of insurance does my business need?

There are several business insurance policies you can add to your cover, and the ones you’ll need most will depend on the size and nature of your company. In general, you should look to include the following:

Public liability: Public liability insurance covers the cost of legal action in the event that a third party dies, is injured, or their property is damaged as a result of your business activities

Employers’ liability: Employers’ liability cover is a mandatory policy for all business owners who employ other people. Similar to public liability cover, it pays legal costs if your business is responsible for an employee getting ill or injured, dying, or if their property is damaged

Professional indemnity: If your business advises customers for a charge, a professional indemnity policy can protect you if you cause the customer to make a financial loss

Product liability: Having a product liability policy means your insurer will pay for legal costs and damages if a product you sell causes illness, injury, death or destruction of property for the party that bought it. You might still be liable for these costs even if the product wasn’t made by your business, so it can be a useful policy to have for shop owners

Equipment and tools: An equipment and tools policy can be good for tradesmen such as builders or florists, as it’ll let you claim if your tools are lost, damaged or stolen

Stock: For businesses like shops and restaurants which keep goods on their premises, a stock policy can be useful. You’ll usually be able to claim up to a certain amount if your stock is lost, damaged or stolen. However you should keep in mind the type of stock you’re storing, as some insurers might have restrictions on what they cover. They might also have certain storage requirements you have to follow, such as keeping food items in a locked freezer

Business interruption: If an insured event results in damage to your property and results in you losing income, a business interruption policy can cover you for at least some of the financial loss

Business buildings: A business buildings policy can help if you conduct your business from one or more specific premises, such as a shop or a home office. It’ll cover you for damage caused by storms, fires, floods and accidental damage to name a few. If you rent your business property from a landlord, it’ll be their responsibility to insure the building

Business contents: Whether you rent or own your premises, you’ll still need to consider business contents insurance – it covers you for general items you keep in your workplace, such as furniture or office equipment

Business motor: If your business uses vehicles, whether they’re removal trucks or pizza delivery motorcycles, you are legally required to cover them with business motor insurance

Cyber: A huge concern for the modern age, cyber insurance can offer an array of protection if your business is targeted by electronic criminals. It can cover you for loss of business, liability and legal costs, public relations, employee education and more

Do I need business insurance if I work from home?

If you conduct your business from a home office you might still want to make sure your equipment and belongings are covered. It’s unlikely a standard home contents insurance policy will cover you for business use, so you’ll probably need to take out a business contents policy for things like your office furniture, computers and printers.

You might also still need a business motor policy if you use a vehicle and park it at home, or stock cover if you keep stock in your home office. Aside from this, any legal policies such as product liability, public liability, employers’ liability and professional indemnity can all apply to your business regardless of where the work is done.

Do I need business insurance if I’m self-employed?

Just as with working from a home office, even if you’re self-employed you might still suffer legal costs and damages resulting from the products you sell or the advice you give – not forgetting that employers liability cover is legally required if you employ other people.

How much does business insurance cost?

The price you’ll pay for business insurance will depend on a variety of factors, including:

  • The nature of your business: Some businesses are at a higher risk of claiming, especially those that work with heavy machinery or the general public
  • The size of your business: Likewise businesses with more employees will need a greater amount of employers’ liability cover and other policies. Businesses with a high turnover may require a higher level of cover for things like business interruption
  • Your business premises: The size of your premises will also affect the cost of your insurance, as bigger buildings will usually have higher rebuild costs. However the location is important too, as insurers may see some areas as having a higher risk of criminal activity or natural disasters such as floods or earthquakes
  • Your claims history: As with all types of insurance, a history of making claims can lead insurers to believe that you are more likely to claim again in the future
  • The level of cover you need: Most of these factors contribute to the overall level of cover you need for your business, and as you’d expect a higher level of cover costs more

This is why it’s always a good idea to compare business insurance policies. Keep in mind providers might have different criteria, and some may see certain factors as more or less important than others, so shopping around is the easiest way to see what’s available for what price.

Compare cheap business insurance quotes

Comparing business insurance quotes with MoneySuperMarket is the easiest way to find a better deal if you’re looking to take out an insurance policy for your business. Just tell us a little about your business and the type of cover you need, and we’ll show you a list of quotes tailored to your needs.

You’ll be able to compare deals by the annual and monthly cost, the level of cover you’ll get, and any extra policies you might be able to add. Once you’ve found the right deal, just click through to the provider to finalise your purchase.

You should always remember that with insurance products, the cheapest available option isn’t always the best. We recommend that you look for a balance between cost and cover, to ensure you have the right business insurance you and your business need.

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