smallbusiness.co.uk: Helping your business think big

Finding the right business insurance can be a difficult and complicated process. There is a certain amount of jargon associated with the subject which can put off many small businesses.

Why do you need business insurance?

Firstly, it's the law! If you employ anyone, insurance is a legal requirement. For example, employers' liability cover protects your staff and labour-only sub-contractors in the event of an accident or injury at work for which you are legally liable. By law, if you have employees, you must have at least £5 million cover.

Business Insurance you must have:

Liability insurance

Most businesses need some level of liability insurance, and employer's liability insurance is the most common. You can talk to your broker to find out what level of liability insurance your business needs. The law states that you must have liability cover in order to cope if the worst happens. There are just under 400 deaths and nearly 30,000 major injuries at work each year in the UK, so this is not something to be taken lightly.

Motor insurance

Drivers know motor insurance is a legal requirement, but many come unstuck when using vehicles for work related activities. If you're employing someone who's using their own vehicle for work purposes other than travelling to work, then you have a responsibility to ensure they are fully covered. This could be as innocent as dropping you off at a meeting - they still require business insurance.

Public liability insurance

Public liability insurance, though not compulsory, is something only a reckless business would cut back on. It covers you for damage against property or persons that you might encounter during your work, for instance, your customers.

Planning ahead

Disasters don't just happen to other people. With business continuity insurance, you buy a policy that's enough to cover you and your business for the worst-case scenario. A cautious business would look to get as much as two years' worth of cover but many make do with one-year policies or less.