Business Insurance Buyers Guide

What is business insurance?

Business insurance is designed to protect businesses from losses which may occur during normal business proceedings. This guide will look at what business insurance covers and how it can protect you.

There are a variety of different areas of cover when it comes to a business insurance policy and many companies will allow you to tailor the cover to suit your needs. This will be dependent on what your business does, the size and location of your business, and your budget. Some of the areas of cover which are typically included in a business insurance policy are detailed below.

Employers' liability

If you have employees, whether they are full-time, part-time or on a short-term contract, you are legally obliged to have employers' liability insurance. This cover is designed to protect you and your business if an employee is injured or becomes ill because of their work.

Employers' liability insurance is a key part of many business insurance policies and will cover the legal costs of defending a claim made against your business as well as any compensation costs which need to be paid out to an employee should your business be at fault.

Public liability

If you come into contact with members of the public as part of your business, regardless of whether that is at your premises or theirs, you should arrange for public liability cover as part of your business insurance policy. 

This type of cover can protect you against claims from members of the public, for injury sustained or for damage to their property brought about by your negligence, when it arises from your business activities.

Business assets insurance

When it comes to running a business, your place of work and the things held within it are paramount to your success. If something were to happen to your business property, such as fire or theft, the cost of replacing everything in your building could be huge. Investing in property insurance as part of your business insurance policy can cover these costs and could end up saving you a great deal of money.

When looking at business assets insurance it is important that you arrange the correct type of cover to suit you. For example, if your business operates out of a shop it is worth getting specialised shop insurance which includes glass cover for shop fronts, as well as stock, which can be hugely important for business owners.

Professional indemnity insurance

This cover is an important aspect of business insurance as it provides cover for claims against your business as a result of actual or alleged wrongful advice or design work for a client. For example, if a client loses money because of an error or wrongful guidance you've made and they try to sue you, then your legal costs would be covered by a professional indemnity insurance policy, as would any awards made against you up to the policy cover limit. Like other liability insurance, it will not cover you for fines or penalties.

Do I need business insurance?

Whether you run a small business or a multinational corporation it is important that you are covered for a variety of risks. The exact cover you will need depends on the business you run and how you run it. If you are unsure about the type of business insurance you need it is worth speaking to an adviser who will be able to discuss the cover you need.

Things to consider when choosing business insurance

Due to the wide range of types of cover available it is important that you understand what insurance you need to protect your business. Even if you run your business from home you may need public liability insurance or professional indemnity cover, depending on the service you provide.

A wide range of insurance covers are available which generally fall under the categories of property or liability insurance.

Property insurance will in general terms cover your business assets - your building, general contents, computers, phone systems and other electronic office / testing equipment, machinery, plant and stock, etc. You can choose the cover which will protect against a range of risks – fire, water damage, explosion, impact, malicious or accidental damage, theft etc. Consider if you need cover for property just in your premises, or also at other locations or when in transit to you or your customers.

Business interruption cover is also important for many business owners, covering overheads that you still have to pay during the period of business recovery, as a consequence of the insured loss or damage that has impacted your ability to trade and reduced your income.

Liability insurance will cover your legal liability for accidental bodily injury or property damage to others – e.g. employers, public or product liability arising from activities in connection with the business. If you make designs or give advice then you will need professional indemnity cover to protect against allegations of wrongful advice.

Business insurance when working from home - If you run an online business or work from home you may feel that you don't need business insurance. However, many risks exist in exactly the same way as they do if you were working from a business premises. Your requirements will depend on business activities, for example if you have staff or visitors to the home for commercial purposes. 

Business insurance from Towergate

We offer tailored business insurance policies to suit your needs so that you can pick and choose the cover and limits required for your business. For more information visit our dedicated business insurance page or call us on 0344 346 0409 to speak to a specialist adviser.