What is business insurance?
Business insurance isn’t one single policy. Instead, it is an umbrella term for types of insurance that help to protect your business financially if something goes wrong. You can usually buy it as a package where you pay one premium for a number of insurance products.
The types of unexpected events a business might face include damage to property, stolen stock, injuries to employees or customers, loss of income and negligence claims.
Types of business insurance
Below are some of the main forms of business insurance and what they cover.
Employers’ liability insurance
This helps cover the cost of claims if an employee gets injured or ill during their work. Businesses with at least one employee legally need employers’ liability insurance. The only exceptions may be if they are a close family member or are based abroad. And if your business is incorporated as a limited company, you’ll need employers’ liability insurance even if you employ members of your family.
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Public liability insurance
This is similar to the above, except, instead of covering employees, it covers the cost of compensation claims if anyone – a member of the public, for example – who is injured or dies as a result of an incident at your business premises or elsewhere as a result of your business activities.
Public liability insurance can also cover you if your business is responsible for any loss or damage to a third party’s property.
Some clients may ask that you have this cover before beginning any work or trading with you.
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Product liability insurance
This helps cover your business if a product you designed, manufactured or supplied,, or even gave away for free, causes damage or injury to someone or their property. This may also cover you for claims made if you repaired, refurbished or altered a product that then caused damage or injury. You may not be covered by product liability insurance if a product is faulty because of poor workmanship or a lack of care by your business.
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Professional indemnity insurance
This covers financial loss to a client due to negligent advice or services provided by your business. Examples of professions that need this include chartered surveyors and solicitors, but anyone who offers expert advice or information may want to consider it.
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Business contents insurance
This covers your business’s belongings and can include stock or equipment that’s lost, damaged or stolen, along with furniture and fittings such as windows. Business contents insurance can also cover visitors’ belongings when they’re on your premises.
You may be able to add money cover or goods in transit cover, for example, to insure against loss or theft, or damage to goods in a road accident, if that’s relevant to your business.
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Business buildings insurance
If you own your business premises, you may also want to consider commercial property insurance to help cover the cost of repairing damage to the property after an unexpected event, such as a fire or a flood. If you rent premises, the owner should have landlord insurance, but this won’t include your business contents, such as equipment and furniture.
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