What Type Of Insurance You’ll Need If You’re Starting A Business
By: George Sweeney, Posted: March 3, 2023
If you’re considering setting up your own business, insurance is one of the most commonly overlooked areas. Although this topic is an afterthought for some, it’s a crucial part of running a company. Without proper insurance, you leave yourself exposed to all sorts of risks and costs.
What does business insurance cover?
This will depend on what sort of business insurance you use and the level of cover you select. Typical things covered by this kind of insurance include:
- Protecting you against claims from third parties (like people or companies).
- Coverage for your business premises in case of fire, theft, damage, or natural disaster.
- Prevention of losses due to fraud or cyberattacks.
- Any damage caused by (or to) vehicles used by the business.
Most business insurers will offer added features and cover for higher premiums, just like with other forms of insurance.
There may also be some differences between policies, depending on the brand you use. So, a particular business insurance policy from one insurer may not offer the same coverage as that of another insurer.
Before you take out a policy, it’s well worth having a thorough read of the policy documents to know exactly what is and isn’t covered.
What type of insurance do businesses need?
This will depend on the risks your business faces, which are often related to your specific industry or profession.
Some lines of business also require mandatory insurance; employer’s liability insurance (EL) is the most common legal requirement.
Different types of business insurance
Here are some business insurance examples to give you an idea about what policy you might need:
- Public liability insurance – if your company interacts with customers, clients, the public, or suppliers.
- Professional indemnity insurance – applicable if your firm handles client data or intellectual property (IP). Also, if you offer advice or some sort of professional service.
- Employer’s liability insurance – if you have one or more employees, this is a legal requirement.
- Specific policies – for example, there are insurance policies designed for builders, caterers, cleaners, contractors, hairdressers, online retailers, pubs, restaurants etc.
- Buildings and contents – this can cover your work premises and the contents kept within (even if you work from your home).
- Business interruption insurance – if you cannot operate due to an incident, this can cover any subsequent loss of revenue for a specified period.
- Legal protection – sometimes called ‘business legal expenses insurance’ is used to pay for commercial legal costs and protects you against legal disputes.
- Personal accident – this is used in case of any serious injury (or death) due to an accident. Policies can often be used for medical costs, hospital bills, and lost income.
- IT and cyber insurance – these policies are beneficial if you operate online or store valuable data. It can protect you against losses relating to hacks, data breaches, viruses, or any other cybercrime.
- Commercial vehicles – if you have any company-owned vehicles (or owned via leasing), this insurance comes in different levels. It can protect against any liability or damage to your vehicles (or someone else’s).