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A guide to business insurance

Learn what types of business insurance are available to you and who are the best business insurers to choose from
Rachel Bridge

/ Last updated on 9th November 2017

A man using an umbrella to protect him from the rain, representing him protecting his business by having good insurance

When you start a business, there are several types of business insurance available to protect you and your business, some compulsory and some voluntary. Having the right ones in place can avoid costly payouts should things go wrong, so it is worth taking the time to decide what you need.

Related: What is Key Man insurance?

How it works

You can buy policies either direct or through a insurance broker, in person or online. Some brokers specialise in insurance for small businesses so can offer a combined package that incorporates all the different elements you need, but always shop around to make sure you are getting the best deal. Here is a guide to what you may need:

Contents insurance

If you are running your business from home, your existing home contents insurance policy might not be sufficient to cover such things as business equipment and stock, so you will need to upgrade it from a domestic policy to a business policy. You should also make sure all business equipment taken out of the home is adequately covered, such as laptops, smartphones, iPads and so on. It’s always best to be upfront with your insurer about what you are doing and what you will need cover for because otherwise, you could find yourself seriously out of pocket if you ever need to make a claim. An event such as a fire or flood, for example, could cause many thousands of pounds damage to stock and equipment.

Professional indemnity insurance

If you are running a business which offers a service or advice – for example as a consultant, architect or accountant – then taking out professional indemnity insurance is vital because it will cover you for claims of negligence and for giving poor advice; including libel and slander, malicious falsehood, misrepresentation, errors, omissions and unintentional breach of confidence. If you don’t have it, a mistake could cost you a lot of money in compensation. Also, clients may want check that you have an up to date professional indemnity policy in place before they work with you. Before taking out a policy, it may be worth finding out what level of cover clients expect.

Public liability insurance

You will need public liability insurance if members of the public or customers come to your place of work, or if you go to theirs, to protect your business from any claims made against it for loss or injury. If you run a painting and decorating business and a client trips over your paint pot, for example, then public liability insurance would cover you for any compensation claims made against you.

You may be automatically covered for public liability insurance through membership of a trade body or professional organisation. Equity, the actors and performers union, for example, provides cover of up to £10 million for its members at no additional charge.

Employers liability insurance

Employers liability insurance is compulsory for anyone taking on an employee, whether permanent, temporary or seasonal. The only exception is if you work at home and are hiring a close relative such as a parent, child or sibling to work with you. The insurance is designed to protect the business owner from any claims arising from illness or injury sustained by an employee in the workplace. Most insurers will automatically provide cover of £10 million, which should be more than enough for a small business.

Tradesman insurance

If you are a tradesman working in other people’s homes, it is particularly important to ensure that you have sufficient insurance in place. As well as public liability insurance, you need to ensure you are covered for any damage to property, or any injuries caused, plus personal accident insurance to cover medical expenses and loss of earnings if you are injured while at work.

Car insurance

You may need to upgrade your existing car insurance to cover you for business use as well as social use, particularly if you are going to be running a business which involves driving clients around, for example, an estate agency.

Things to consider

If you run an online business selling products via the internet, you will also need to take out product liability insurance to cover you for any damage or injury that your products may cause. Even if you have not manufactured the products yourself, you could still be liable for compensation claims if the product bears the name of your business, or if you have changed the product in some way. You will also need some level of stock cover in case the stock you hold is damaged or stolen.

List of business insurers

Hiscox Business Insurance

Hiscox are good if your not sure what kind of insurance suits your company, just mention your type of business on their site and they will help you find the best cover.

Insurance Options: Employers Liability Insurance, Public Liability Insurance, Professional Indemnity Insurance, Personal Accident Insurance, Key Man Insurance, Office Insurance, Cyber and Data Risks Insurance, Online Retailer Insurance, Retail and Shop Insurance, Trades and Construction Insurance and Insurance products.

Useful: They provide insurance for startups, small and medium-sized businesses and various other industries.

AXA Business Insurance

AXA Business Insurance provides insurance services to various ventures including self-employed individuals and small businesses. They also support startup businesses.

Insurance Options: Public Liability Insurance, Employers’ Liability Insurance, Professional Indemnity Insurance, Van Insurance, Residential and Commercial Landlord Insurance, Commercial Property Insurance, Fleet and Haulage Insurance and Shop Insurance.

Useful: You can choose between conventional and online business insurance. There’s also a 10% online discount with each insurance service.

Barclays Business Insurance

Barclays Bank provides business insurance in partnership with Allianz Insurance. They offer protection to startup businesses in case of personal injuries and property damage.

Insurance Options: Contractor Insurance, Motor Trade Insurance, Landlord’s Insurance, Office Insurance, Home Business Insurance, Shop Insurance and Tailored Business Insurance.

Useful: You can have 3 months free Public Liability cover if you’re a start-up.

More Than Business

More Than Business provides business insurance products and services to various ventures including small businesses and startups.

Insurance Options: Van Insurance, Business Car Insurance, Public Liability, Professional Indemnity, Landlord Insurance, Start Up Businesses, Shop Insurance, Office Insurance, Small Business Combined, Hotel Insurance, Hair & Beauty Salon.

Useful: They offer free 24-hour professional guidance, startup discounts and interest-free monthly instalments.

Direct Line Business Insurance

Direct line is responsible for providing a wide range of Insurance packages to different businesses. They cover almost all of your standard needs.

Insurance Options: Office Insurance, Shop Insurance, Hair and Beauty Insurance, Small Business Insurance, Professional Indemnity Insurance, Landlord Insurance, Van Insurance and Business Car Insurance.

Useful: Direct Line caters to people working from home as well. They also provide public liability insurance.

Insurance Choice Business Insurance

Insurance Choice is an insurance broker set up by highly experienced executives to provide services to individuals and businesses.

Insurance Options: Professional Indemnity Insurance and Commercial Property Insurance, Commercial Vehicle Insurance, Fleet Insurance, Landlord Insurance and Tradesman Insurance.

Useful: Insurance Choice provides protection for almost all of your business assets, from accidental damage, fire and theft, vandalism, flood and storm damage.

Lloyds Bank Business Insurance

Lloyds Bank Business Insurance services are provided by Arthur J Gallagher, part of one of the largest insurance brokering groups in the world

Insurance Options: Public Liability Insurance, Tradesman Insurance Professional Indemnity Insurance and Landlord Insurance.

Useful:  Products are sourced from a panel of providers, ensuring you get the right cover at a competitive price. These insurance policies can be beneficial to all kinds of industries.

Instasure Business Insurance

Instasure provides a wide variety of insurance covers to a large pool of business clients including startups. They are backed by some of the world’s largest insurers. Their insurance policies are specifically tailored to meet the modern demands of businesses all across the UK.

Insurance Options: Combined Commercial Insurance,  Commercial Propery Insurance, Liability Insurance & Other.

Useful: Instasure’s dedicated team is always available to assist you with quotes and any questions you may have regarding your insurance. They not only provide coverage but also ensure you comply with any relevant laws.

Natwest Business Insurance

Natwest provide insurance covers to almost all types of industries, whether the business is small, medium or large. They also advise you on just the right protection irrespective of your business’ size.

Insurance options: Small Business Insurance, Landlord Insurance, Public Liability Insurance, Van Insurance and Shop Insurance.

Useful: Natwest works closely with a wide range of businesses. Their team spends time with each business to identify the right kind of insurance it requires.

Premier Line Direct Business Insurance

Premier line insurance helped transform UK insurance policies for the better. Their standard for speed and service are known far and wide.

Insurance Options: Retail Insurance, CDontractor Insurance, Office Insurance, Freelance Insurance, Commercial and Industry Insurance, Landlord and Property insurance, and a range of industry-specific products.

Useful: They have a responsive and reliable team that understand small businesses and can provide good cover at a competitive price.

HSBC Business Insurance

HSBC offer protection specifically designed for your business’ needs.

Insurance Options: Professional Indemnity Insurance, Public Liability Insurance, Employer’s Liability Insurance and Van Insurance. They also provide Business Loan Protection.

Useful: You can usually get a discount on your first year of insurance through one of their preferred partners.

Related: What is trade credit insurance?

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