If you run a small business, personal insurance won’t cover business-related claims. Here’s what you need to consider.
Types of Business Insurance
| Type | What It Covers | Who Needs It |
|---|
| Public liability | Injury to customers or damage to their property | Most businesses |
| Employers’ liability | Injury to employees | Anyone with employees |
| Professional indemnity | Mistakes in your professional advice | Consultants, accountants, designers |
| Product liability | Injury from products you sell | Retailers, manufacturers |
| Business contents | Equipment, stock, tools | Anyone with business assets |
| Business interruption | Loss of income if you can’t trade | Most businesses |
Employers’ Liability Insurance
Legal requirement if you have any employees (including part-time).
| Detail | Requirement |
|---|
| Minimum cover | £5 million |
| Penalty for not having it | £2,500 per day |
| Certificate | Must display at your premises |
Public Liability Insurance
Covers you if a customer is injured or their property is damaged.
| Business Type | Typical Cost |
|---|
| Freelancer (home-based) | £50-£100/year |
| Tradesperson | £100-£300/year |
| Retail shop | £200-£500/year |
| Restaurant/cafe | £300-£800/year |
Professional Indemnity Insurance
Covers claims of professional negligence.
| Profession | Recommended Cover |
|---|
| Accountant | £500K-£1M |
| Consultant | £250K-£500K |
| Web developer | £250K-£500K |
| Architect | £1M+ |
| Financial adviser | £1M+ |
Business Contents Insurance
| Item | Value | Insurance Needed |
|---|
| Laptop | £1,500 | Business contents |
| Tools | £2,000 | Business contents |
| Stock | £5,000 | Business contents |
| Furniture | £3,000 | Business contents |
| Total | £11,500 | Contents insurance |
Home insurance typically excludes business equipment. Don’t assume your laptop is covered if you work from home.
Insurance by Business Type
| Business | Likely Needs |
|---|
| Freelancer (home office) | Professional indemnity + business contents |
| Builder/plumber/electrician | Public liability + tools cover + van insurance |
| Shop/retailer | Public liability + contents + product liability |
| Restaurant/cafe | Public liability + contents + employers’ liability |
| Consultant | Professional indemnity + public liability |
| E-commerce seller | Product liability + public liability + goods in transit |
How to Save
| Tip | Saving |
|---|
| Bundle multiple covers | 10-20% |
| Increase excess to £250 | 10-15% |
| Pay annually | 10-20% |
| Don’t over-insure | Only buy what you need |
| Compare at renewal | 20-40% |
| Join a trade association | Group discounts available |
Bottom Line
If you have employees, employers’ liability is a legal requirement. If you interact with customers or clients, public liability covers the most common risks. If you give professional advice, professional indemnity is essential. Start with the legally required cover, add based on your specific risks, and shop around at renewal. Business insurance is tax-deductible.
This content is for educational purposes only. Not financial advice. Do your own research before investing.