Does your small business need insurance?
Of all of the things to consider when you run a small business, insurance is one of the most crucial. Business insurance can offer valuable peace of mind by reassuring you that you’ll be covered if the worst happens - and you may be required by law to have certain policies in place, depending on your business type.
But with so many different types of policy available, how do you know which ones your business needs? Here’s a guide to the most important types of business insurance to consider.
Employers’ liability insurance
Employers’ liability insurance covers your business against legal and compensation expenses if one of your employees falls ill or sustains an injury as a result of working for you.
For most limited companies that have employees, or have more than one director, employers’ liability insurance is a legal requirement. If you’re the sole director of a limited company, you don’t necessarily need to have it in place, but some companies may require you to have a policy in order to work for them.
If you’re a sole trader or a partner in a partnership where none of the partners is a limited company director, then you’re not legally required to have employers’ liability insurance.
Public liability insurance
Public liability insurance protects your business against compensation claims and legal costs if you cause personal injury, death or property damage/loss to a third party. Most policies cover you for incidents at your premises or off-site at events or activities organised by your business.
Although public liability insurance isn't a legal requirement, it can prove to be invaluable to some business owners. It should be a key consideration if you operate from premises that members of the public visit or if you organise off-site events, for instance.
Professional indemnity insurance
Any business that provides a professional service, offers advice or designs products could be sued by a customer if they are unhappy with the outcome of the work. Professional indemnity insurance is designed to cover the associated costs of settling any disputes, including legal fees and compensation.
Every business has equipment that they rely on for day-to-day operations. Contents insurance is designed to cover you for any mishaps that happen to vital equipment that could affect your business. This can include theft, fire, flooding, loss or damage.
If you’re getting cover, bear in mind that the equipment you keep on site is sometimes treated differently for insurance purposes to the portable equipment you take with you on the road, like your smartphone or laptop.
Cyber liability insurance
Cyber crime is one of the biggest risks facing modern businesses. Cyber liability cover is designed to help mitigate that risk by covering your business against data breaches and cyber attacks and all the damage they can inflict.
In the event that your business becomes a victim of a cyber crime, such as hacking, malware or ransomware, cyber liability insurance is designed to cover a broad range of legal claims, compensation costs, and certain fines under GDPR.
Company directors and officers insurance
If you’re a director of a limited company, you might want to consider investing in company directors and officers insurance – also known as management liability insurance.
Rather than protecting the business as a whole, company directors and officers liability insurance protects the individuals who have management responsibility against personal claims, including breaching health and safety laws, mishandling of the company pension or errors in financial reporting.
Surprisingly straightforward small business insurance with FreeAgent and Hiscox
FreeAgent has partnered with Hiscox to provide insurance designed especially for small businesses. Using the data in your FreeAgent account, you can get a guide price, build a policy that’s right for your business and see all your policy documents in your account.
Find out more about small business insurance with FreeAgent and Hiscox.