As a business owner, insurance can feel like yet another piece of admin on top of all the paperwork you have to deal with. But getting insurance for your business is not as complicated as it seems and may actually save you money in the long run.

All businesses will face some level of risk, and insuring against these risks is likely to be a good idea. In this guide written by our business insurance partner Superscript, you’ll learn:

  • Whether you need insurance
  • Different types of cover
  • How to get insured

Does your business need insurance?

When deciding whether you need business insurance, there are three main questions to ask yourself:

  1. Could you afford the cost of a claim? Whether it’s a claim against your business, or a claim you need to make, the cost will likely far outweigh the amount you spend on purchasing your insurance. In this respect having business insurance in place could actually save you money in the long run.
  2. Do you have a legal obligation to purchase insurance? The only insurance that is mandatory in the UK is employers’ liability insurance. If you employ any staff you’ll need to take out appropriate insurance. You could be fined if you don’t have it in place.
  3. Will insurance open up more business opportunities? Depending on the industry you work in you may find having insurance in place provides more opportunities for your business. If you work with clients you may find they require you to have adequate insurance to enter into a relationship. Likewise, if you’re part of a professional organisation or trade body, you may find that your membership requires you to have certain covers in place.

When should you get insurance?

It’s never too early to get cover in place. You should consider insurance as soon as your business is liable or exposed to risk. You could be exposed to risk even before you start work. For example, if you have purchased equipment such as laptops you may want to cover this before you start trading officially.

There is some flexibility in how you can purchase your insurance. For instance, you can buy now and set a date in the future for your cover to start. In some cases, you can purchase retroactive insurance. This means that even if you’ve been trading for a while without adequate insurance, you may be able to get cover to protect you from any claims made relating to a period before you had the insurance in place.

What does business insurance cover?

Business insurance is a broad term which includes a number of different insurance products. These protect your business against legal and compensation costs arising from a range of risks.

Each cover is different in the protection it provides, and the range of covers you choose to make up your business insurance should include that which protects you specifically against the risks posed both to your business and the risks posed by the operations of your business to others.

Insurance product names may be confusing, but getting the right combination of covers to protect your business is possibly simpler than you think! Having the right type of insurance will ensure you are adequately covered should you need to make a claim. You could also save money by removing covers that are not relevant to your business.

What covers should you consider?

There are many different types of cover available. Those that are right for your business will depend on what it is you do, the industry you work in and the size of your business. However, there are some common covers that most businesses should consider:

Public liability

Public liability covers legal and compensation costs if a member of the public – anyone who isn’t your employee – is injured, or their property damaged, due to your business’ negligence.

Professional indemnity

Professional indemnity cover provides legal and compensation cover for businesses that offer professional services, including advice and consultancy. This cover is particularly important for companies that work contractually and includes claims like breaches of contract and acts of errors or omissions.

Employers liability

Similar to public liability insurance, except it covers your employees. This means legal and compensation costs associated with accidental injury to your employees or damage to their property during the course of them carrying out the actions the business asks of them.

This cover is mandatory for employers. It’s worth being aware that if you employ people and you don’t have employers’ liability insurance, you may receive a fine of up to £2,500 for each day you didn’t have it!

Cyber liability

An essential cover for most businesses, particularly those working with personally identifiable information (PII), payment card information (PCI) or medical records (PHI). Cyber liability covers risks related to storing and handling data, such as accidental privacy breaches, hacking and cybercrime and business interruption as a result of a cyber security breach affecting your systems or those of your suppliers.

What information do you need to get covered?

Getting insurance needn’t be complicated. With Superscript, you can get a quote and set up your cover online in less than 10 minutes. To complete a quote for insurance you’ll typically need the following information to hand:

  • Your business type – are you a sole trader, limited company, or partnership?
  • What your business does – what industry do you work in, and what type of work do you carry out?
  • Your business turnover – how much money do you expect to receive for your work over a 12 month period?
  • Where your business operates – does your work cover the UK only or will you be serving other territories too?
  • Details of your employees – if you have any
  • Whether you have cover in place currently – and if you do, your renewal date if you know it

Depending on what your business does, there may be some other information required to get you the right cover.

Superscript’s flexible monthly cover gives small businesses and self-employed professionals the freedom to adjust cover as things change. Get covered in 10 minutes, starting from just £5 per month. Get a quote.