What Are the Main Types of Business Insurance?
Having insurance can help protect your business if things go wrong.
There are many different types of insurance you can get for your business, including public liability insurance, employers’ liability insurance, product liability insurance, professional indemnity insurance and business contents insurance, so it can be difficult to figure out what you really need.
In this article, you’ll learn more about the different types of business insurance and discover if you need them for your business. This will help you make smart financial decisions and avoid catastrophic legal fees if someone makes a claim against you.
Public liability insurance
Public liability insurance protects your business if someone is injured or a person’s property is damaged as a result of your business activities. This type of insurance is extremely useful for businesses that engage in dangerous activities or come into contact with the public. For example, if you’re a self-employed tradesperson and are undertaking dangerous building work, you should ensure you have public liability insurance to protect your business if someone is injured or their property is damaged. This insurance will cover all legal and compensation fees if someone makes a claim.
Employers’ liability insurance
If you employ people in your business, then employers’ liability insurance is a legal requirement. This type of insurance will protect your business by helping you pay compensation if an employee is injured or becomes ill due to their work. Your policy must cover you for at least £5 million, and you can be fined £2,500 every day if you’re not properly insured. Therefore, it’s extremely important that you get employers’ liability insurance as soon as you become an employer.
Product liability insurance
Product liability insurance is similar to public liability insurance because it protects you in the event that one of your products injures someone or damages their property. This type of insurance will cover your legal and compensation fees if someone makes a claim, so it’s important to be covered if your business designs, produces or sells products.
Professional indemnity insurance
If your business provides services that involve advice, instructions or designs, then you should consider getting professional indemnity insurance. This will cover your legal and compensation fees if your advice causes financial loss for a client and they make a negligence claim. Although this type of insurance isn’t required by law, it can add credibility to your business and therefore improve your professional reputation.
Business contents insurance
Business contents insurance is useful for any type of business. This insurance covers the assets, equipment and furniture you need for your business, so if you need to repair or replace these items due to damage or theft, you won’t be put in a tricky financial situation. This is especially important if you rely on expensive equipment to keep your business running.
It can be confusing to learn about all of the different types of business insurance, but with this helpful guide, you’ll be able to figure out exactly what you need for your own business. Make sure you get the right insurance policies to avoid large legal fees in the future.