What is business insurance?
Your business faces a number of risks every day. Business insurance helps control these risks so that if problems do come up you can minimise the damage to your business.
Employers' liability insurance
If your business has employees, by law, you are required to have employers’ liability insurance to cover at least £5 million. This insurance must cover all types of employees (ie part-time, full-time, contract, as well as temporary staff).
Employers’ liability insurance covers the cost of compensating employees if they’re injured at work or become ill because of the work they do, as well as covering their legal fees.
Third-party motor insurance
If your business uses motor vehicles you’re required by law to have third party motor insurance to cover at least £1 million for property damage and an unlimited amount for personal injury. This insurance covers the cost of paying someone’s claim if they’re injured or their property is damaged because of an accident you or your employee caused.
Driving without insurance is a serious offence that can result in your vehicle being destroyed, you or your employee being disqualified from driving, and/or being charged with a fine of up to £5,000.
Public liability insurance
This insurance covers the cost of compensating members of the public for death, injury or damage to their property due to your or your employees’ negligence. ‘Members of the public’ include anyone who isn’t your employee, including people visiting your business or people involved in or watching activities you have organised.
Professional indemnity insurance
If your professional advice causes clients to lose money, this insurance will cover the cost of compensating them for their loss. Industry regulators may already require professionals such as accountants, financial advisers and solicitors to have this form of insurance. Professional indemnity insurance is different from maximum liability caps found in business contracts. This caps your total liability at a predetermined level and can provide you with valuable certainty about the level of your financial exposure in the event that a claim is made against you by a client.
Product liability insurance
If there’s a fault in a product that you have designed, manufactured or supplied and, because of this, someone is injured or their property is damaged, this insurance covers the cost of compensation.
Environmental liability insurance
If your business causes damage to land, water, protected plants or animals or their habitats this insurance will cover the cost of repairing such damage.
Directors and officers' liability insurance
Directors and officers' liability insurance covers the cost of compensation claims made against a business' directors or key managers for any alleged wrongdoing. A company's director has a responsibility to carry out their duties with reasonable skill and attention and to act in good faith in the company’s interests. If something goes wrong, they may be held personally liable by shareholders or others that have a financial interest in the company.
Business equipment and office insurance
This insurance provides cover for damage to any equipment that you use in the course of business, for example, if your laptop, mobile phone or other business equipment gets stolen, lost or damaged.