Business insurance is a way to protect your business against financial loss. It’s sometimes called commercial insurance or commercial business insurance.
Running a business comes with risks. Having the right business insurance can protect you against mistakes, accidents, theft, damage and legal fees.
There are several different types of business insurance, all for different purposes. The type you need depends on the type of business you run and the risks you face each day.
Do I need business insurance?
Some businesses are required by law to have certain types of business insurance cover in place.
Businesses that employ staff must legally have employers’ liability insurance. And if you use a car or van for your business, you legally must have commercial vehicle insurance.
If your business deals with third parties, it’s also advisable to consider taking out public liability insurance. Although this isn’t compulsory, it’ll help you to protect your business and some clients might insist that you have it.
You may also find that some regulatory bodies expect you to have professional indemnity insurance.
You’ll find out more about these types of business insurance below.
What are the different types of business insurance?
Employers' liability insurance
This covers compensation claims staff make if they’re injured or die while working in your business. The minimum legal limit of cover is £5 million, which means they’d pay out up to £5 million if the worst happened. However, most employers’ liability insurance policies give a £10 million limit.
Public liability insurance
This liability insurance covers your clients against injury and property damage caused by your work. Some clients might ask to see proof of your public liability insurance before they’ll work with you.
Commercial vehicle insurance
Commercial vehicle insurance is motor insurance for businesses that use commercial vehicles. You must have third party cover as a minimum. This is so that the other party’s costs would be covered if you were at fault. You can choose more comprehensive cover if you wish, to protect your own vehicles against fire, damage and theft.
Professional indemnity insurance
Professional indemnity insurance protects companies that offer professional advice, knowledge or skills. It covers claims made against your business by clients who’ve lost money because of your work.
Business travel insurance
Business travel insurance is a good idea if you or your staff travel abroad for work. It’ll give you cover in case your travel plans are and in case anything happens to your equipment while you’re away on business.
Small business insurance
If you need a small business insurance quote, you’ll find some helpful information about small business insurance here.
This comparison will help you find the best small business insurance from a range of business insurance companies. It includes package business policies, which offer several types of insurance in one policy. Think about what your business needs, and then get as many online quotes as possible to find the best policy.
Even if you’re self-employed, you’ll still need to think about having the right business insurance in place. This is because if your business was sued, it could cost you millions and leave you bankrupt. You may also have tools or equipment that would be expensive to replace if they were lost or stolen.
Business insurance will give you the same protection you’d have if you were employed. This also applies if you work from home.
If you’re self-employed, you should consider all the usual types of business insurance (detailed above and below). But you might also wish to think about personal insurance. This would help you to receive the same benefits as someone who is employed. You might like to look at: income protection, life insurance, critical illness cover, private medical insurance and a private pension.
What other business insurance cover should I consider?
There are other types of business insurance that you might like to consider buying to help protect your business. These include:
Commercial property: This business insurance covers your building, stock and equipment.
Business interruption insurance: This pays out if you lose income if your property is damaged.
Goods in transit insurance: This protects your stock and equipment while it’s on the move.
How to compare business insurance
Doing a business insurance comparison is key to finding the right, and best value, commercial business insurance. To do this, you need to compare policies from a range of business insurance companies.
Here’s what to do:
Decide what kind of business insurance you need. You’ll need to assess your risks before you make this decision as it’ll affect what protections you get. Remember that some types of business insurance are a legal requirement.
Think about how much cover you want. You’ll need this information to help you pick which insurer to go with.
Shop around for the best business insurance and the best deals. Head to Money.co.uk where you’ll have the option to compare business insurance quotes.
Reassess your business insurance cover every year. As your business grows and evolves, you may wish to amend the types of business insurance you have, or the level of cover.
You can read more about how to insure your business here.
Find cheap business insurance
It’s best not to cut corners when it comes to choosing your business insurance. You should choose the best business insurance that you can afford. But when it comes to getting a commercial insurance quote, there are a few things you can do to make your business insurance cover cheaper.
Compare as many policies as possible: Get business insurance quotes from several different insurers. This lets you find the commercial business insurance cover you need at the best price. It can also help you haggle the price of your insurance.
Pick a higher voluntary excess: Your excess is what you have to pay when you make a claim. Choosing a high voluntary excess on your commercial business insurance can save you money on the price of your policy. But make sure you pick an excess you can afford.
Buy your commercial business insurance policy online: Some business insurance is discounted when you buy it online. But you may need to speak to them on the phone or in person if you run a large business.
Pay for your commercial business insurance policy up front: If you pay by monthly direct debit, it breaks up your payments. But you could end up paying more in interest. If you pay up front in full, most insurers give you a discount.
Give accurate values to insure: Work out exactly what you need covered, such as stock, equipment, or premises. This way you won’t overestimate and overpay for your policy, or underestimate and find yourself unable to claim.