Kristina Fox
Holly Bennett
When working out your business expenditure, you’ll need to include everything from one-off purchases of equipment to monthly costs, including insurance.
Below, we consider the factors that can affect the price of your business insurance package.
How much does business insurance cost?
It’s difficult to put an exact figure on how much business insurance costs, since it depends on the business and its specific circumstances. However, it can range from a few pounds to hundreds of pounds a month, depending on the scale and nature of your business and the cover options you choose.
» MORE: Do I need business insurance?
What can affect the price of business insurance?
Generally, the following can affect the cost of your business insurance:
- the size of your business
- the location of your business
- the types of cover you choose
- the maximum level of cover you want
- how risky your industry is
- your chosen excess (the amount you pay upfront on a claim)
- whether you’ve made a claim in the past
This isn’t an exhaustive list – prices can differ between insurers for many reasons. It’s worthwhile getting a quote from a range of providers to help you get the best deal for your individual circumstances. You could also use a business insurance broker.
Changing the number and types of cover options in your insurance plan or adjusting the level of cover will likely affect the price of your business insurance.
The risk of getting less cover than you need
It’s important not to scrimp on cover just to get a cheaper premium. Having a lower level of cover than you need could lead to you being underinsured, and your insurer may not pay out as much as you expect on a claim.
You may be able to find examples of how much premiums can cost on a provider’s website, though these may only be representative for a small percentage of customers and you could end up paying more than this.
» COMPARE: Business insurance
What does business insurance include?
Business insurance can be made up of a range of different policies. Some of the most common include:
- Public liability insurance: This covers compensation and legal costs if a member of the public is injured or dies, or their property is lost or damaged because of your work.
- Product liability insurance: This protects you if you make or sell a product that injures a customer or makes them ill.
- Employers’ liability insurance: If you have any employees, this offers cover for claims if they become injured or ill because of their work.
- Professional indemnity insurance: This covers claims made against you by clients who feel they have suffered financial loss because of your advice or services.
» MORE: Product liability insurance explained
Other options include:
- cover to protect your tools or stock
- cyber insurance to help your business recover financially after a cyber event, such as phishing or a ransomware attack
- business interruption insurance and business buildings and contents insurance for cover against unexpected events, such as a flood or fire.
When it comes to business insurance, the only legal requirement is to have employers’ liability insurance. This applies if you employ anyone in the UK who is not a close member of your family. If you own a family business that is a limited company, you will still need this cover. Otherwise, you could face a fine of £2,500 for each day you don’t have the correct cover.
However, while this may be the only legal requirement, it is also worth considering protecting your business with other types of business insurance cover.
» MORE: Everything you need to know about employers’ liability insurance
Image source: Getty Images
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