What Insurance Does My Small Business Need?
When it comes to venturing out on your very own business journey, there are many different aspects for a business owner to consider. From the location of the premises, to how many employees are needed and what equipment you will need.
One area that may get overlooked is what kind of insurance is needed for a small business to operate.
Not to worry though. We’ve put together a simple guide so you can understand the different types of insurance your small business may need.
Why business insurance is important
Every Small Business owner must ensure that they are protected with the appropriate insurance policies in order to cover the business, themselves, and their staff against any potential risks that the business may face.
Risks to business can come in many different forms. Such as public claims, reputational damage and physical theft.
It is important that you are aware of the different types of insurance that your Small Business needs in order to ensure that you are covered for every curve ball that may be thrown your way.
Which business insurance do I need?
Your insurance cover depends on what industry your business operates in.
You want to make sure that your insurance cover is tailored to protect you against the risks that might actually pose a real threat to you in your industry. At Todd & Cue we appreciate our clients, and know that at the end of the day, nobody wants to pay for something that they do not need.
Knowing the industry you operate in gives us the best chance at getting you appropriate insurance cover at a great price.
Popular industry Insurance Services include:
- Hotel Insurance
- Office Insurance
- Pub Insurance
- Property & Landlord Insurance
- Restaurant Insurance
- Shop Insurance
- Sports Club Insurance
- Tradesmen Insurance
What business insurance is required by law?
You are only required to legally have one policy as a small business, Employers’ Liability Insurance.
Employers’ Liability Insurance will cover your business if one of your staff members claims an illness or injury as a result of working for your business. It also covers legal costs and compensation from defending the case.
You might wonder, ‘do I really need business insurance?’. Well, it’s an expensive risk to take. If you don’t have Employers’ Liability, the Health and Safety Executive can fine you £2,500 for every day you go unprotected. In our eyes, it’s best not to take the risk.
What other small business insurance do I need?
While Employers Liability Insurance covers the essentials for your business to operate legally, there are a range of other insurance options that your business could benefit from. We’ve pulled together the most popular choices for small businesses below:
An important and popular choice for business owners of operations both big and small, is a comprehensive Public Liability policy.
A Public Liability policy covers for claims of:
- Bodily injury
- Physical injury
- Personal injury
- Advertising injury
- Property damage
A Public Liability insurance policy is in place to allow your business to continue its normal operations while dealing with any claims of negligence or wrongdoing.
This insurance is useful for most businesses as most will come into contact with the public in some way. Not only does it cover the public, but also clients, customers and suppliers.
Did you know:
Public Liability policies also provide cover for the cost to defend and settle claims.
Commercial Property Insurance
Any property that is used for commercial purposes, regardless of ownership, MUST be insured on a Commercial Property Insurance policy in order to offer an adequate level of cover for the owner.
Commercial Property Insurance, often referred to as Commercial Buildings Insurance, covers the cost of repairing, rebuilding or replacing your premises, stock and/or equipment.
Commercial Property Insurance covers you against risks such as:
- Burst Pipes
- Falling Trees
- Subsidence Theft
In the unfortunate event of any of the above risks occurring there are two types of Commercial Property Insurance that you can take out:
1. Commercial Buildings Insurance
Commercial Buildings insurance is in place to cover the cost of repairing or rebuilding your business premises if it is damaged or destroyed. Don’t be fooled – even if you own the premises outright, consider this policy to cover yourself against the cost of repairs or rebuilding of your property.
Alternatively, if you only rent the premises, then the Commercial Building Insurance is your landlord’s responsibility however, it is recommended that you take out Contents Insurance to protect your stock and equipment.
2. Commercial Contents Insurance
A Contents Insurance policy covers you for the cost of replacing your business’ stock or equipment if it is damaged or stolen.
‘Replacement as new policies’ replace an item that has been stolen or damaged beyond repair. While ‘indemnity policies’ take wear and tear into account, replacing your items at their current value.
Top Tip: If you are taking out contents insurance you should insure stock against its cost price, not its sale price. If there are times when you have more stock on your premises than usual for example in the run-up to Christmas, you should make sure your insurance covers this.
Business Interruption Insurance
Business Interruption Insurance is helpful in case a crisis that is beyond your control hits your business. Whether that be a storm, flood or fire – your business may need to close while repairs or rebuilding work commences.
Many businesses do not have the necessary financial resources to continue trading should the worst happen. This cover aims to help you weather the storm and put your business in the same trading position as it was before.
Your Business Interruption Insurance covers you for any loss of income during periods when you cannot carry out business as usual due to an unexpected event. Such as damage caused by fire, storm or flood, or the breakdown of essential equipment.
This insurance can be a stand-alone policy, however it is usually linked to a property insurance policy or comprehensive business insurance policy.
Cyber Liability Insurance
If your business holds any form of data on individuals, then you may find Cyber Liability Insurance to be a vital cover for support.
In today’s digital world, technology has become a vital tool in every aspect of business and such heavy reliance increases the exposure to threats such as viruses, hackers and/or misuse of software or hardware.
A Cyber Liability Insurance policy covers the losses, damage, or loss of information from IT systems and networks. Cyber falls into the first party and third party risks, which include:
First Party Insurance Cover:
- Loss or damage to digital assets such as data or software programmes
- Business interruption from network downtime
- Cyber exhortation where third parties threaten to damage or release data if money is not paid to them
- Customer notification expenses when there is a legal or regulatory requirement to notify them of a security or privacy breach
- Reputational damage arising from a breach of data that results in loss of intellectual property or customers
- Theft of money or digital assets through theft of equipment or electronic theft
Third Party Insurance Cover:
- Security and privacy breaches, the investigation, defence costs and civil damages associated with them
- Multimedia liability, to cover investigation, defence costs and civil damages arising from defamation, breach of privacy or negligence in publication in electronic or print media
- Loss of third-party data, including payment of compensation to customers for denial of access, and failure of software or systems
How much does small business insurance cost in the UK?
While each insurance policy premium will vary, the cost will be based on how comprehensive the cover is. Smaller businesses will have less at risk and therefore cheaper premiums. It’s always worthwhile to check in with an insurance broker to get a quote so you can budget for your insurance accordingly.
At Todd & Cue we offer free quotes for business insurance and are always happy to discuss your insurance needs so you get the cover that is best suited to your business.
Benefits of having business insurance
Without business insurance, business owners may have to pay out of their own pockets for any damages and legal claims against their small business. This could be a financially devastating outcome for some businesses. Business insurance eliminates the risk. If you have the correct insurance in place, you can have more peace of mind to fix the scenario at the forefront of the problem.
Unsure where to get small business insurance?
Here at Todd & Cue, we cover a vast selection of Corporate and SME insurance cover to help protect your business at the very best we can.
Want to know more? Why not check out our blog post on Why You Need Small Business Insurance, or get in touch with us today! For a free quotation or professional advice, give us a call on 0191 482 0050 or email us at firstname.lastname@example.org.