The level of cover you need depends on many factors, including the type of business and the size of your company.
So, as part of our Best for Business series, here we run through the different types of business cover available through MoneySupermarket to help ensure you are fully protected.
And because we know every business wants to keep their expenditure to a minimum, our comparison service will also help you to get the best price possible for your cover.
Public liability insurance
No matter how big or small your business is, public liability insurance is essential. It protects you and your business against claims for compensation from visitors who have been injured or whose property has been damaged because of your business.
So if, for example, there was a cable running across your office floor (or even in your home if that's where you work) and a client visiting fell over it and fractured their wrist, they might decide to claim compensation for the injury. In this case, your public liability insurance would protect you, covering legal fees, NHS medical costs and the compensation payment itself.
If, on the other hand, you didn't have this type of cover, you would be expected to pay out the whole claim yourself, which could amount to thousands of pounds. All in all, it could have a serious impact on your business.
Public liability insurance also protects you against claims from construction accidents, which can be even more expensive. Your cover will pay out for the compensation and legal costs arising from accidents like this.
You'll need to decide how much cover your business is likely to need, but it's worth noting most insurance firms offer cover from £1million. However, if your business operates in a high-risk industry, such as one that uses powerful machinery, you might need more.
In order to assess how much cover you need, it's a good idea to think about what would happen in the worst case scenario and how much it might cost you if a dispute went to court.
Employer's liability insurance
Whether you have one employee or 100 and whether they are full-time or part-time, permanent or temporary, you need to have employer's liability insurance. If you don't, you'll be breaking the law and could face a fine of up to £2,500 per day for every day you don't have cover. The only exception is if all your employees are family members.
Employer's liability insurance will protect you should an employee become injured or ill as a direct result of their work. For example, it will pay out any compensation and legal costs you may face if an employee is injured by machinery in your business.
This type of insurance usually covers you for up to £10million and you'll need to buy cover of at least £5million to satisfy your legal obligation.
Professional indemnity insurance
If your business offers advice to customers or professional services to other businesses, professional indemnity insurance is a good idea. If, for example, you make a mistake which results in one of your clients suffering a loss, the policy will cover you for the costs of any successful claim the client makes against you.
Even if you feel you haven't done anything wrong, the costs associated with defending the claim are still likely to be expensive. Insurers usually offer cover levels from £50,000 to £5,000,000.
Typical professions that can benefit from this type of insurance include journalists, architects, solicitors, financial advisors, business consultants, accountants and engineers. If you belong to a professional body or are in a regulated profession, you might be required to have a certain level of professional indemnity insurance in order to practise.
As well as protecting your business against potential claims from employees or clients, you'll need to consider cover for your business office premises and its contents.
Business buildings insurance: To protect your office premises against risks such as flooding or fire you will need to have buildings insurance in place. Bear in mind this will only be your responsibility if you own the building. If you rent it, it should be covered by your landlord, so check first.
If you do own the building, make sure it's insured for the re-build value rather than the market value (which can be less or more, depending on location). Fixtures and fittings should also be included in the sum insured – kitchen units, carpets and sales counters, for example.
Note also that if you work from home, you may still need business buildings insurance but it would cover you for both business use and personal use so you wouldn’t need to take out a separate personal home policy.
Alternatively, you might be able to rely on your personal home buildings cover, but be sure to notify your insurer if you work from home. If you don’t and you make a claim, it could affect the pay-out.
Contents insurance: Most businesses wouldn't be able to function without their computers, laptops and phones so it's important to have adequate contents cover to ensure these items are protected against destruction, loss or theft. Whatever you do, don't under-insure – if you do and later make a claim, your insurer will reduce your payout proportionately or may not pay out at all.
If your job involves travelling and you take expensive items with you, check whether they are insured under your contents cover or whether you need a separate policy. If you travel overseas, make sure you have adequate and appropriate business travel insurance.
Shop front cover: If your office has an exposed front to the premises, you should also consider adding specific cover to protect windows, signage and awnings.
Stock cover: Any stock kept in the premises must also be insured separately from the contents of the office. The same goes if you keep significant amounts of cash on the premises.
Business interruption cover: If your business premises were severely damaged due to flooding or fire, business interruption cover (sometimes known as consequential loss cover) would make up for the money you lost while you were unable to trade or additional costs you'd have to pay to get the business back up and running.
Getting the best deal
As with any type of insurance, the key to getting the best deal on your business insurance is to shop around and compare as many quotes as possible.
MoneySupermarket has teamed up with Simply Business to help you find the right level of cover to suit your business at the right price. No matter whether you run a business from an office or work from home, by using our comparison service, you can search through a wide range of insurance deals at a click of a button.
Do remember, though, that the cheapest policy isn't always best. Insurers provide different levels of cover and it's important to make sure your policy covers you and your business for everything you require it to – no matter what the price is.
For further tips, take a look at our business pages.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.