What is small business insurance?
Business insurance is a type of cover you can – and in many cases must – take out to protect your small business from a variety of costs. It comes in a variety of shapes and sizes, and often the specifics you’ll need from a business insurance policy will depend on the nature of your work.
Do I need business insurance for my small business or start-up?
Some aspects of business insurance are legally required. For example, you’ll need auto insurance if your small businesses uses vehicles, while you’ll also need employers’ liability cover if you employ anyone.
Even policies that aren’t mandatory can still be helpful. You might otherwise find your business has to shell out serious money for reasons that can be easy to overlook and hard to predict.
What cover can I get for my small business?
If you run a small business you should generally include the following cover in your business insurance policy:
- Public liability: Public liability insurance is useful if you, your employees or any part of your business regularly deals with members of the public. It’ll cover you if someone is injured or their property is damaged whilst on your business premises
- Professional indemnity: If part of your work involves advising clients, you’ll need a professional indemnity policy. It’ll cover you if any advice you give leads to a financial loss to your customer as a result of negligence on your part. Even if you aren’t at fault, there may be legal costs you have to pay to defend yourself in court, and professional indemnity cover can also help here
- Employers’ liability: If your business employees other people then you’ll be legally required to take out employers’ liability insurance. You’ll be covered for any costs you might face if one of your employees is injured or becomes ill as a result of the work they do for you
- Product liability: If your business sells products, whether they’re manufactured by you or a third party, you should include product liability insurance as part of your small business cover. It’ll be useful if you need to claim as a result of your products injuring someone or making them ill
- Equipment and tools: An equipment/tools policy can provide invaluable cover if your equipment is stolen or damaged as a result of an insured event. Be sure to read your policy documents for a better idea about which tools are covered, and whether there are any limits on the amount you’ll be able to claim for
- Stock: Certain types of business keep stock items on their premises, especially out of hours when the property is unstaffed. Stock cover can help if your stock is damaged, lost or stolen
- Business interruption: A business interruption policy can be useful no matter how big or small your business is, as anyone could conceivably suffer a loss of business as a result of an insured event. It’ll cover you if you lose income after events such as fires, storms or possibly civil unrest
- Business buildings: If you own the property from which you conduct your business, whether it’s an office, shop front or café, you might benefit from a business building policy. It can help if your property is damaged as a result of theft, fire and certain forms of accidental damage. However if you’re renting your premises from a landlord, insuring the building is their responsibility
- Business contents: Whether you own your business premises or rent, any contents on the property should also need to be covered. Business contents policies work differently from equipment policies in that they generally apply to things like furniture and basic office equipment. It won’t usually cover business-related tools
- Business motor: Many businesses use vehicles as part of their work, whether for deliveries or transport. Insuring your business vehicles is legally required, at least to a third-party level of cover. If you use vans in particular, there are a various business van insurance policies you might want to consider
Does my small business need any specific insurance policies?
Many insurers offer specific insurance packages designed for particular types of small business. Depending on the level of cover you need and what you need to cover, you might want to consider specialist business policies for:
- Cafes and restaurants
- Home businesses
Do I need small business insurance if I work from home?
If you run your business from a home office, it’s likely you’ll still have certain office equipment. This could include a work phone, printing or faxing equipment, or office furniture. While you might have a contents insurance policy in place, it’s unlikely the cover will extend to items involved in your home business, which means business insurance can still be useful.
You can still benefit from many of the standard business insurance policies, such as professional indemnity, stock, and motor cover. You’ll also still be legally required to have employers’ liability cover if you employ others.
How much will business insurance cost for my small business?
The actual cost of business insurance for your small business will depend on a number of factors, including:
- The size of your business: Understandably the bigger your business, the higher the stakes when something goes wrong, especially from a legal point of view. This does mean that business insurance is likely to be cheaper for small businesses, though there are other factors that influence the cost of cover
- The nature and risk of your business: Some businesses will be at greater risk of certain insurable events than others. This could mean working in high-crime areas or those at severe risk of flood, or being in an industry that deals with heavy machinery or sensitive information
- The number of employees you have: Having more employees means you’ll need to take out a greater level of employers’ liability cover, but it might also increase the risk of other occurrences. For example, you might end up more likely to foot the bill for legal costs related to employee negligence or theft
- The level of cover you take out: Factoring in all of the above essentially dictates the level of cover you’ll take out in your business insurance policy. The more cover you need, the more you’ll have to pay in premiums
Compare insurance quotes for your small business
Comparing business insurance quotes with MoneySuperMarket and our preferred partner SimplyBusiness is the easiest way to find a better insurance deal for your small business. Just tell us a little about yourself, your business and the level of cover you require, and we’ll put together a list of quotes tailored to your needs.
Then you’ll be able to compare quotes by the level of cover you get, the price you’ll pay for it, and any extra policies that might be available either as standard or for an extra cost. Once you find the right deal, just click through to the provider to finalise your purchase.
However as with any insurance product, you should be aware that the cheapest available deal isn’t necessarily the best. You should pay just as much attention to the cover you’ll get for your money; remember to read through any policy documents so you know exactly what’s included and excluded from your policy. This way you can avoid paying too much for cover you don’t need as well as missing out on vital policies just to save a few quid.