Editor | 20 May 2019
Six Small Business Insurance Policies You Should Consider

Six Small Business Insurance Policies You Should Consider

When you’re setting up a new business, the last thing you want to think about is what happens if everything goes wrong. But accidents do happen and, if you aren’t insured, they can have a dramatic impact on your fledging company.

Some types of insurance are compulsory for businesses. Others should be considered carefully while you are setting up.

There may even be one or two types of insurance on this list that you aren’t even aware of.

Employers’ Liability Insurance

Employers Liability Insurance (EL) is the only type of insurance that is compulsory for small businesses.

EL will cover any legal or compensation costs that your business will incur if a member of your team suffers an injury or illness as a result of working for you.

If you don’t have an EL, the Health and Safety Executive can fine you £2,500 for every day you aren’t covered. So it’s imperative that you get an EL policy from day one.

Public Liability Insurance

Public Liability Insurance (PL) is probably the second most popular type of insurance for small businesses.

It covers your business against any claims made by members of the public, including accidental injury or property damage that can attract significant legal fees and compensation costs.

In many sectors, clients and suppliers will insist that you have PL protection as a condition of working with them. So a PL policy may represent a worthwhile investment.

Contents and portable equipment insurance

Most businesses will have equipment, technology and other assets that enable the smooth running of operations.

Just like your home contents cover, business contents insurance will protect your equipment investments and cover you against on-site theft, fire, flooding, loss or damage.

Similarly, portable equipment insurance guards against any damage or theft of equipment that you transport around including smartphones, laptops and camera equipment.

Professional indemnity insurance

Professional indemnity insurance (PI) is designed for businesses that offer services or advice.

PI polices are often taken out by freelancers and other self-employed professionals whose work leaves them susceptible to compensation claims if they make a mistake or a client loses money as a result of work carried out.

Like with Public Liability Insurance, clients may insist that you have PI if you operate in a sensitive sector.

Directors’ and Officers’ Liability Insurance

Business founders and directors should consider directors’ and officers’ cover (D&O), which is also known as management liability insurance.

This type of insurance protects individuals in a business, rather than the business as a whole, protecting them personally against health and safety law breaches, financial mismanagement claims and other types of professional misconduct claims. Some policies also include protection against insolvency, which can be useful in new firms.

If you are a start-up seeking investment then your investors may insist that you have D&O insurance.

Cyber Liability Insurance 

A relatively new type of insurance, Cyber Liability cover protects your business against cyber attacks and data breaches.

Cyber crime is a new but growing threat to businesses of all shapes and sizes, particularly those that store or process large amounts of personal and sensitive data.

With the introduction of GDPR, the fines associated with any kind of data breach have increased and Cyber Liability insurance can help mitigate these costs.

Cloud Accountant is a digital accounting specialist that has helped hundreds of small and medium sized firms get off the ground. For more information on how we can help your new business get in touch. Call: 0808 281 0303.