If you do some research into business insurance, you will quickly realise that there are a whole host of different options. There are insurance policies to protect your business from everything, ranging from personal injury and the loss of a key person, to faulty products and flooding. Understanding what each type of business insurance does is a key part of ensuring that your business is adequately covered.
What Is Business Insurance?
Business insurance protects your business from unexpected losses, such as losses from a compensation claim or damage created from a professional mistake. There are a range of different types of business insurance available and they cover losses experienced in the course of your day to day activities. For example, from a customer claiming compensation or equipment being stolen.
Why Do I Need Business Insurance?
There are a lot of risks that come with running a business, but insurance is there to help cover the costs should you face mistakes, damage, accidents, theft or legal fees. Without business insurance, you could be faced with unavoidable expenses that you are unable to cover.
What are the Types of Business Insurance That I Need?
There is no knowing what could happen to your business, which is why it’s important to consider a range of different types of business insurance. Some types of business insurance, such as employers’ liability insurance, are a legal requirement or required by a regulatory body. Others are optional but recommended. Below, we have listed some of the most common types of business insurance.
Public liability insurance covers you if a client or customer, or a visiting member of the public, claims to have been injured by your business. It also covers you if anyone claims they have had their property damaged by your business.
Professional indemnity insurance protects businesses from someone claiming that a service they provided was inadequate. For example, if someone sues you because they are unhappy with the standard of your work. This type of insurance also covers you if someone is accusing you of being negligent, delivering the wrong training or making a mistake that has cost them money.
Property liability insurance protects landlords and property owners against claims made against them in relation to their property. If someone claims compensation for a personal injury or property damage related to your ownership of a property, property liability is there to cover you.
If your product is faulty and causes personal injury, damage to property or loss of property, product liability insurance protects you against the cost of compensation. Though a faulty product is unlikely, it’s a risk that you should protect your business against.
If an unexpected event means that you can’t conduct business as usual, business interruption insurance covers you for the loss of income. For example, if a fire or flooding damages your business premises and work has to stop.
Invoice insurance is ideal for small businesses, and it allows you to protect yourself against losses that occur due to late paying customers. You can insure invoices on an individual basis.
If your business needs to defend itself – for example, if someone is trying to claim compensation against you – legal protection helps to cover the cost. The aim of legal protection insurance is to ensure that you are able to afford the legal fees associated with representing yourself.
Occasionally, HMRC decides to investigate businesses, to ensure that their accounts are being taken care of correctly and everything is above board. If this incurs any professional fees, tax investigation insurance will help to cover the cost.
Cyber insurance protects your business from cyber threats, such as data breaches or hacking. If your work computer systems are compromised, cyber insurance helps to rectify the damage.
As the name suggests, key person insurance covers a business from the financial impact of losing a key person due to death, terminal illness or critical illness.