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Published 12 April 2023
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Types of Business Insurance

Business insurance can include a wide range of products, from public liability insurance to cyber cover. Find out what’s available to protect your small business.

Since there are many types of business insurance, your policy can be as wide ranging or as focused as you choose. 

Before you decide what insurance you need to protect your business, you’ll want to understand the cover types on offer. Below, we explore some common types of business insurance in detail.

» MORE: Business insurance explained

What are the different types of business insurance?

In the table below you can find more detail about the most common kinds of business insurance available and the types of risk they cover.

Insurance typeWhat it covers
Public liability insuranceThis can cover you if a member of the public gets injured, ill or dies, or their property is lost or damaged, because of your work.
Professional indemnity insuranceThis could pay out if a client makes a negligence claim against you because they believe they lost money because of your advice or services.
Product liability insuranceThis could pay compensation costs and legal fees if a product you supplied made someone ill or injured them.
Employers' liability insuranceIf an employee becomes injured, ill or, depending on the policy, dies because of work they did for you, this could cover compensation and legal costs.
Contents insuranceCan cover the cost of repairing or replacing stolen, damaged or destroyed equipment or stock.
Tool insuranceIf you’re in a trade and your tools are stolen from a secure location (such as a locked garage), this could cover the cost of replacements. It may also cover damage or loss.
Tradesmen insuranceThis covers the cost of injury while on the job, tool replacement and damage to a client or their property.
Product liability insuranceThis covers the cost of repairing the business premises you own if they are damaged by an unexpected event, such as a fire, flood or storm.
Personal accident coverIf injury, either at work or outside the workplace, stops you or a key person (named on the policy) from working, this could offer weekly payments to make up for lost income while you recover, or a lump sum for permanent disability.
Buildings insuranceThis could cover some of the potential shortfall in lost gross profit if your business couldn’t trade for an extended period of time after an unexpected event, such as a flood. It could also cover increased costs to keep your business afloat during the disruption.
Legal costs coverFighting a claim made against you can be costly. This policy can cover your legal fees when contesting a claim in court.
Business car insurance or van insuranceIf you drive any vehicle on UK roads, you need insurance. If you use a vehicle for business purposes, you need specific business vehicle insurance or commercial vehicle insurance if driving is your main job.
Cyber insuranceIf there was a data breach at your company or your IT systems are damaged by a cyber attack, this could cover the cost of replacements and compensation for customers affected by the data breach.
Director and officers insuranceThis can cover claims made against directors and key managers of your company for ‘wrongful acts’, such as breaches of duty and neglect.

What insurance do I need for my business?

There are two types of business insurance you must have by law, if they apply to you. These are:

  • Employer’s liability insurance for at least £5 million, if you have employees.
  • Motor insurance (at least third party) to meet traffic and road safety legislation, if you and your employees drive a vehicle on public roads for work purposes.

Otherwise, consider your main concerns, which might be anything from compensation claims to damage to business stock. The above is not an exhaustive list of cover types, and won’t necessarily all be relevant to the risks your business faces

What is and isn’t covered can vary across providers, so check the details. This includes the most the insurer would pay out (maximum limit) and how much you will pay towards a claim (excess). 

Business insurance can be tricky to navigate, so ask the insurer or broker if you’re unclear about anything. 

» MORE: Do I need business insurance?

Image source: Getty Images

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