What insurance does my small business need?

The world of small business insurance can seem like a minefield and we’re here to help. In this guide, you’ll learn about the different types of insurance you might need to consider for your business and why they are important – freeing you up to focus on life’s small wins, like getting home on time.

We’ll explore these business insurances:

• Employers’ liability insurance
• Public liability insurance
• Personal accident insurance
• Professional indemnity insurance
• Business buildings, contents and stock insurance
• Business interruption insurance

There are cases where you’re legally required to have employers’ liability insurance as a small business. If you employ staff – even if they’re short-term hire, casual workers or contractors – you could need this policy.

Employers’ liability insurance is designed to cover legal and compensation costs for your business if one of your staff members claims they’ve suffered illness or injury as a result of working for you.

In some situations you might be exempt from needing employers’ liability insurance, like when your employees are close family members or hired abroad. However, it’s always worth double-checking with your insurance provider to make sure you’re operating under the right level of cover.

If you require employers’ liability insurance and don’t have the adequate cover, you could face the Health and Safety Executive (HSE) and fines of up to £2,500 for every day you’re not properly insured. Again, it’s best to contact your insurance provider if you have any concerns.

Being taken to court can be stressful and costly. So when setting up a company, public liability insurance might be a consideration for you and your business. It’s designed to cover the costs associated with claims made against you by members of the public for property damage and accidental bodily injury, illness, disease or even death as a result of your work.

And it’s amazing what things businesses can face. For example, in Ireland in 2018, a shopkeeper was sued by a burglar who injured himself during a break-in. Even cases that seem destined to fail can lead to costs for the business – the shopkeeper in question was asked to pay a €600 processing fee for the claim to be assessed.

Depending on the nature of the injury, compensation claims can go into five or sometimes six figures once you’ve factored in legal fees and the settlement payment. If a customer or client were to make a valid claim on your premises, public liability insurance seeks to cover the associated legal fees.

You may still want to take out public liability insurance if your business doesn’t have a physical premises. If you’re a consultant, for instance, you could accidentally damage a client’s property while working on-site. 

In some cases, a client might write it into the contract that you must have public liability cover before you can work with them.

Even if you don’t work in a particularly high-risk environment, accidents can happen. Personal accident cover might be an option for you as it’s designed to cover the insured person for  fatal and incapacitating injuries.

Successful personal accident claims can see cash sums paid to you and your loved ones to cover essential expenses. This insurance even aims to cover some accidents that take place both in and out of the workplace.

Anyone is capable of the odd slip-up, especially when they’re trying to spin plates managing their own business. However, if an error results in you accidentally sharing sensitive information without permission, or loss of a sensitive document, a client could have grounds to make a claim against you.

This is where professional indemnity insurance (PI) might be valuable if you give advice or offer professional services to other businesses, or if you deal with client data or intellectual property. It’s designed to cover the costs incurred when a client claims you’ve made a mistake causing them financial or reputational loss.

It goes without saying that you should make sure you’re doing everything you can to minimise errors. Mistakes come from being overworked and a lack of time, so take advantage of tools that will help you cut down on time-consuming tasks and admin.

Countingup is the two-in-one business account and bookkeeping app that helps self-employed people across the UK win small by saving hours on time-consuming admin. It automates bookkeeping tasks, making it simpler to manage financial admin and reducing the risk of mistakes. 

Whether you work from home or have separate business premises, you might consider business buildings insurance. It works in a similar way to buildings insurance, but is designed for businesses and aims to cover your property under circumstances in which a standard home insurance policy might not.

You can also consider taking out cover for the contents of your business premises, as well as for tools and equipment. Such a policy could pay out for repairs and replacements in the event any of these items are lost, stolen, damaged or destroyed (provided that they are stored properly and not unattended).

Understandably, if any of these items are crucial to your work, it’s really important that you’re able to get them back as quickly as possible to minimise business interruption. Successful claims under this type of cover seek to pay the cost of replacements or repairs.

Meanwhile, if you manage your own stock, whether on your premises or in storage, stock insurance aims to cover the cost of replacing it if it’s damaged, destroyed or stolen. No business wants to find themselves in a position where they’re unable to fulfil orders for reasons out of their control.

All kinds of things can prove to be an interruption to business, from a flood or fire to civil unrest. Covering yourself against financial losses that are a direct consequence of a business interruption, such as loss of revenue, loss of rental income and additional staff costs, can help your business get back to where it was before disaster struck.

As with every big investment, you likely want to protect your business against anything unexpected which could put a strain on your finances. While there’s often a temptation to save money on insurance premiums and take the risk, the right policy – or combination of policies – can help contribute toward a safety platform to build a successful business. Proper insurance should help you get back on your feet if you’re ever dealt a bad set of cards.

Covid-19 forced many small businesses to close their doors and pause trading for months at a time. Those with the relevant business insurance will be able to recover some of the losses they suffered during this period.

In January 2021, the Supreme Court ruled in favour of small firms receiving payments from business interruption insurance policies, after many insurers refused to pay out on certain policies. The ruling is expected to provide a lifeline for many of the affected businesses, helping to make sure they can continue trading beyond the coronavirus crisis.

So, while there’s often a temptation to save money on insurance premiums and take the risk, the right policy – or combination of policies – gives you a platform to build a successful business, free from the worry of ‘what if?’.

Insurance is an essential safety net that can help you get back on your feet if you’re ever dealt a bad set of cards.

Insuring your business might seem overwhelming, but it certainly needn’t be. With the right insurance in place, you can rest easy knowing that your small business is covered against the unexpected, allowing you to focus on those small wins, like wooing new customers and finishing early on a Friday.

We work with Superscript as our chosen provider because of their simple approach to business insurance. Like us, they champion life’s little wins. Superscript brings five-star Trustpilot-rated cover to small businesses like yours through an easy-to-use website with cover that’s sorted in minutes. Click here to get your quote.

Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority.

Individual cover purchased online is offered on a standardised, non-advised basis and is not bespoke. Terms, conditions and coverage limits are predetermined by the Underwriter. If you require bespoke coverage offered on an advised basis, please contact our in-house broking team.