Small business insurance

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What is small business insurance?

Business insurance covers you for financial losses if something unexpected happens while running your business, like legal claims, theft or damage to property and stock.

Even small businesses need business insurance. In fact, losses to a small business could be even more disastrous than to a larger one that could better absorb any losses.

Even if you’re a sole trader and your business is only you, it’s a good idea to get some quotes to find the right cover for your company.

Why do I need small business insurance?

If you have employees, you're legally required to have employer's liability cover to protect your business against employee compensation claims. 

But business insurance can also help cover other damages or loss of earnings, which can be vital for a small company or start up. 

What insurance should a small business have?

Here are some elements of cover that could be included in your small business insurance policy:

  • Employer’s liability – a legal requirement that covers compensation claims if an employee is ill or injured because of their work for you
  • Motor insurance – this is also a legal requirement if you have any company vehicles 
  • Public liability – this can cover claims from customers if they’re injured or their property is damaged because of your business
  • Professional indemnity – an aspect of cover that protects you against claims for poor workmanship or bad advice
  • Business interruption – if your company is unable to run due to an unexpected incident like a fire or flood (disruption due to Covid is not covered)
  • Equipment and stock insurance – you’ll be compensated if your stock or equipment are stolen or damaged
  • Buildings and contents insurance – to insure your business’ premises against risks like fire, flooding and thefts

Can I get insurance that’s specific to my business type?

The risks you'll need insurance for depend on what type of business you run.

It’s important to assess your business for its unique needs so you can make sure you’re getting the right type of cover.

When you get business insurance quotes you’ll be asked questions about the nature of your business and what you want covered, so the quotes you get will be suitable for you.

But no matter what business you have, you’ll need employer’s liability cover if you have any employees. 

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Insurance for different types of small business

A few types of small business insurance include:

Market trader’s insurance 

You’ll need to think about the products you want to sell and the kind of business insurance and other certification you might need. 

For example, if you sell homemade food or drinks, you’d need to register your kitchen with the environmental health department and get a food hygiene certificate, or your insurance might not be valid. 

You might want your market trader’s insurance to cover public and product liability.

Some cover for weather damage might also come in handy to protect your stall.  

Can you get market trader’s van insurance? 

In order to make sure your van is covered for business use (as well as the goods the van is carrying), you’ll need to check it’s included in your business vehicle insurance policy, or look at specialist insurance providers.  

Luckily, there are a couple of companies offering van insurance specifically for market traders, so you can compare different options and make the right decision for you.  

Shop insurance

Shops can be threatened by many perils, from theft to flooding, which makes business insurance essential.

You’re likely to need public liability and cover for the products you sell. Buildings insurance to protect your premises could be wise too, if you own the shop. 

Online shop insurance

Whether you're a small one-person band working via eBay or Etsy or run an international e-commerce company, you can get cover tailored to your activities.

Online shop insurance covers many of the same issues as physical shop insurance – your stock, your employees and claims from your customers. If you have a home-based business you might have some cover from your home insurance – check your policy to find out. 

Restaurants and cafes

You’ll most likely want public liability insurance to protect you from potential claims arising from any spills or trips. 

Make sure you have enough cover to protect your stock if it’s stolen or damaged, but also that any expensive equipment – like coffee makers or other kitchen gadgets – is covered. 

Agencies or other office work

As well as the essential employer’s liability cover, you’ll need to insure your office equipment, and it could also be worth getting professional indemnity cover too. 

Painters and decorators

With so many tools of the trade, you’ll want to make sure your business insurance covers all your equipment and supplies. 

You’ll need commercial van insurance for any company vehicles as well.

How much will small business insurance cost?

This depends on a few things, such as:

  1. Size of your business

    smaller businesses usually have less stock and equipment to cover which could mean cheaper premiums

  2. Type of business

    some businesses have a higher risk of things going wrong, meaning you’d be more likely to claim and so your cover would cost more

  3. Number of employees

    the more employees you have, the more chance that someone could make a claim against you

  4. Level of cover

    insuring expensive assets or extensive cover will cost more

Do I still need business insurance if I work from home?

It's probably worth considering home business insurance if you have company equipment or stock.

If customers or employees visit your home, consider public liability cover and employers liability cover respectively. Professional indemnity insurance and cover for any company vehicles could also come in handy. 

What do I need to get a small business insurance quote?

To compare small business insurance quotes with us, you’ll need to tell us about: 

  • Your specific business and trade
  • The age of the business
  • Projected turnover
  • If you’re a sole trader, partnership or limited company
  • If you employ any staff, or labour-only subcontractors

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