smallbusiness.co.uk: Helping your business think big

In association with: Comparethemarket.com

Taking a chance on good fortune is a dicey business when you’ve got a living to make, wages to pay and bills to settle. So, if you’re running your own small business, the only safe bet is insuring against hard times and disaster.

Some policies will help you sleep easier – such as contents insurance – while others are required by law. In any event, you should seek professional advice and make sure you take out the appropriate cover.

Employers’ liability insurance is a legal requirement for nearly all businesses. It covers compensation that may be paid to staff who are injured or fall ill while working on or off site.

It’s no gambling matter – you must be covered for at least £5 million, although most insurers offer £10 million. The Health and Safety Executive has the power to fine your business up to £2,500 a day if you are not covered properly.

Public liability insurance cover isn’t compulsory, but if customers or clients visit your premises then it’s a high risk strategy not to have it. This insurance covers you for legal fees and expenses if someone is accidentally injured by you or your operation. If someone trips or falls and it’s your fault, you could be facing a hefty bill. It will also cover you if you damage someone else’s property while on business – such as spilling coffee over a client’s computer.

Professional indemnity insurance protects your business from claims by dissatisfied clients. Anyone can make a mistake, but if it turns into a dispute then the stakes are raised and the results could be crippling.

There’s even insurance for limited company directors who, by definition, are protected from liability. But Directors’ Insurance gives added security in exceptional circumstances, such as negligence, when directors can be sued.

Odds are you’ll be keeping an eye on general business insurance too. You’ll need to consider equipment insurance to cover the computer and printer in your home office, or buildings and contents insurance to protect your premises, fixtures and fittings. And don’t forget to update motor insurance policies to include work use. If you’re employing someone who uses their own vehicle for work, it’s your responsibility to make sure they are properly covered.

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