When you’re starting a business, you want to make sure that you’re taking what efforts you need to protect it. In this article, we take a look at the different types of small business insurance you may need, depending on your circumstances.
Financial shocks can have a tremendous effect on your business’s survival, especially in the early days. As such, insurance can be a crucial aspect of making sure that you can get through them. Understanding which type of coverage is best for your business is important. Let’s take a look at the different types of small business insurance you may need.
Different types of small business insurance can protect your company from a variety of risks, both large and small. Some of the most common types of coverage include property damage, liability, workers’ compensation and commerical general liability.
It can be daunting find the correct insurance for your business, but it’s encouraging that companies offer commercial insurers and brokers power over their data, giving business owners reassurance that their policies are well managed.
Let’s take a look at the most common types of small business insurance you should be considering.
Want a simple checklist beyond policies? How to protect your small business covers the essentials, business insurance, secure business email and GDPR basics.
What is General Liability Insurance?
One of the most widely recommended types of insurance across all types of business is of general liability insurance. Effectively, this is catch-all insurance that makes sure that your business is protected from claims from anyone.
Liability insurance even covers libel and slander as well as advertising injuries, such as copyright infringement or false advertising. Of course, it doesn’t stop you from being liable, allowing someone to take legal action if required.
Monetary loss might not be the only injury that your business suffers as a result of a claim. It does make sure that you have the financial protection you need against them.
Mistakes Made by Your Business
Liability insurance generally covers harm that your business might cause to anyone, typically by way of an accident or negligence. However, professional indemnity insurance is a little different. It instead protects your business when the services that you have provided don’t quite go as you had intended.
There are some professions in which professional indemnity insurance is required by law. Such as accountants, solicitors, financial advisors, architects, and so on. Most basic commercial businesses and B2B businesses might not need indemnity insurance.
Though that doesn’t mean that it’s not still good protection to have. It’s there to protect you against claims that you made a mistake in your work that led to negative outcomes. Mistakes that aren’t specifically related to harm caused.
Insuring Your Team
If you’re hiring any employees, then you are legally required to have employer’s liability insurance. There are many ways in which an employer is obligated to ensure the health and safety of their employees.
Having insurance makes sure that you’re able to provide the money necessary to protect them financially. This could be in the event of an injury, illness or any other kind of damage that happened as a result of their work.
There are some businesses that don’t require you to have employer’s liability insurance. These include businesses that only hire close family members, but usually, you are legally obligated to do so.
Arranging the Correct Vehicle Insurance
Contents insurance is typically used to protect the assets that stay on the business premises. You likely have assets that don’t fit that bill, such as your vehicles. All vehicles owned by a company need to be insured. You will find it’s quite likely that you have to be insured to legally operate them on the road.
There is the basic insurance that covers the costs of third-party injury. However, if your vehicle is a critical part of your business, then comprehensive insurance is a must. Fully comphrensive insurance protects against a much wider range of costs might be more sensible.
Only need vehicle insurance for a short time? Hiring a van can be a smart move for businesses during the festive period and perhaps for even longer. If you plan on hiring a van, it makes sense to arrange temporary van insurance.
This allows you to get coverage for the period of time when you will be using the vehicle without the need to take out an annual policy. You can insure the van in the short term and have comprehensive cover, helping to provide financial protection as well as peace of mind.
Managing 2+ vehicles? Here’s why UK businesses are switching to multi-vehicle policies.
Business Contents Insurance
The business contents that you would regularly keep, whether it’s in an office, warehouse, manufacturing plant, worksite or otherwise, are usually quite different from what is covered by more general contents insurance. You might need to cover things like digital equipment, tools, machinery and more.
In many cases, these are some of the assets in your business that are most at risk of damage due to accidents or otherwise. Ensuring the most expensive of them protected is sure to be a necessity.
Some business contents, such as heavy machinery, might have their own specific type of insurance as well. Research and identity what types of insurance you might need for all of the equipment and tools that require.
Insuring Your Business Premises
Where you do your business is very important. Not only is it the “home” of your business, but it might also house all of the assets and equipment necessary for you to make a profit. If you lose the use of your office or commercial building, it can mean serious interruption to your business processes.
To that end, you should look at the potential of using commercial building insurance. It’s pretty vital if you do have a commercial building. Of course, if you’re working from home, you might not need that. Though you should have home and contents insurance, instead.
What Insurance Do you Need When Working From Home
If you’re running a business from your home, then some of your potential costs in the event of an accident or a disaster might be covered by your homeowner’s insurance or your contents insurance.
However, there are plenty of things that homeowner’s policies don’t cover. This might have a result of running a business from home.
Insurance providers are starting to offer more of these extra types of coverage. However, you will have to ask for them rather than simply expect them to be there. Running a business from home complicates things a little but you can usually still get the cover that you need.
Wrapping up
Whether you should invest in any kind of insurance or not, is all going to be down to whether your business relies on those assets to function and how likely the risk to them is. You will need some protection, you just need to decide which you should prioritise.
There are a variety of different small business insurance policies to protect your business. It is important to research which policies are best for your specific business.
You should speak with an insurance agent to find the right coverage for your needs. This will give you the reassurance that your business is protected in the event of an unexpected incident.
