There are lots of things to consider when you set up a small business. Amongst the excitement of getting your enterprise off the ground and generating sales, it's also important to consider the less glamorous financial aspects of your business - business insurance is one of them.
What should I look for in a small business insurance UK policy?
There are three main types of insurance for small business cover you should consider:
What is Employer's liability insurance?
You must have employer's liability insurance to cover you as the business owner - this is compulsory by law and you must be insured for at least £5 million, although most insurers offer at least £10 million.
As an employer, you are responsible for your employee's health and safety in work, and for your employees who have left work.
Employer's liability insurance will protect your business against any legal claims made should an employee becomes injured or ill and claims the reason is related to their working conditions.
What is Public and Products liability insurance?
Unlike employer's liability insurance, neither public or products liability cover is compulsory by law, however it could save you money should your business or your products harm someone and you're considered liable.
You will need public and products liability insurance to cover you against claims made by members of the public and other businesses against your business, employees or products.
You should always consider the impact your business will have on the public, if you provide a service from a single location you will need to consider the risks against injuring customers, for example - you will be liable if a customer trips over the carpet at your office.
If you sell a product you need to consider the larger risk of claims being made against your business.
You need to protect yourself against claims relating to third party damage caused by the products you sell. You should look for a policy that protects you against safety claims, spoilage, indemnity costs and manufacturing quality.
Buildings and contents insurance
Finally, you should consider buildings and contents or commercial property insurance. This ensures that your premises and assets (stock, machinery, IT equipment etc) are protected against a range of risks including fire, flood and theft.
What to look for when you get quotes for small business liability insurance
Insurance requirements for small businesses differ from company to company as no two businesses are the same. So, it's important that you shop around to find the best policy for you at the best price.
Always compare both the quality of the cover and the cost. While you may be drawn to cheap liability insurance for small business it is also important to ensure that you take out a comprehensive policy that covers every risk that your company faces. If you don't, you could find yourself out of pocket if you have to make a claim.
Always make sure that any maximum cover limits that apply are sufficient for your business and that the insurance for small business policy covers your specific type of business, your business possessions, stock and your business premises (office, shop, tradesman etc).
And, as some insurance policies have a maximum limit on the income your business can earn, make sure you take out small business liability insurance that is suitable for the size of your business. Once you've found several policies that fit the bill, you can pick the cheapest small business liability insurance quote.