Businesses face many risks from physical damage to lost revenue to personal injury court cases. To stay afloat after losses, businesses can purchase many types of business insurance that cover liability and direct damage as well as protection for employees. Consider which types of insurance work best for your company.
What is business insurance and why do I need it?
Accidents can happen and any business runs the risk of losing its reputation, cash flow and ability to survive if disaster strikes.
If an employee makes a mistake or a customer slips on your property, you could be liable for costs or get sued. Let’s say you’re a plumber and you incorrectly fix a pipe for a restaurant, which forces it to stop operating for a month. You could be forced to pay out what the restaurant would have earned in that time.
This is why business insurance exists. It offers protection for a range of things like getting sued and much more. If you don’t have insurance, you might have to pay for damages out of your own personal finances.
Types of risks that businesses take
- Injuring someone. Someone slips in your retail shop and sues you for medical bills.
- Damaging property. You own a car wash and one of your employees spills a chemical inside a car.
- Selling faulty products. You accidentally sell fruit contaminated with E. coli and your customers get sick.
- Giving incorrect advice. You provide a client with a flawed building design that needs repairs after it’s built.
- Financial mismanagement. Your company breaches safety or industry regulations and has to pay fines.
- Accidents outside your control. Your business faces a theft, fire, storm, damage or other disaster.
What are the different types of business insurance?
There are a few different types of business insurance policies out there, so you will need to decide which one is the right one for you. Below are examples of some of the types of business insurance you can find cover for:
Professional indemnity (also known as personal indemnity insurance or PII) is designed to cover the potential costs of unforeseen mistakes for both self-employed workers and businesses across many different industries.
Public liability insurance is a type of cover that protects you if your business becomes legally liable if someone is injured or their property is damaged.
Cyber Liability Insurance
Cyber insurance is designed to protect your business against a wide range of Internet-based risks and risks relating to information technology infrastructure and activities.
Business contents insurance will cover damage or loss to your possessions and equipment in your work premises as a result of fire, flood or theft.
What type of business insurance do you need?
Make sure you cross these off your list. We’ve made a table to help you determine which of the three main types of business insurance you may need:
|If your business…||You run the risk of…||Insurance can help with…|
|Product liability insurance|
|Public liability insurance|
|Professional indemnity insurance|
|Cyber liability insurance|
|Management liability insurance||Companies with:|
Frequently asked questions
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Cyber liability insurance Cyber insurance is a form of specialty cover designed to protect your business from a wide range of Internet-based risks such as data breaches, malicious cyber hacks and email forgery.
Product liability insurance Product liability insurance protects your business against claims made against you if a product you've sold causes personal injury or property damage.
Employers' liability insurance If your business employs staff, you are legally required to have employers liability insurance to make sure both you and they are protected.
Public liability insurance in the UK Public liability insurance protects your business against claims of personal injury or property damage that a third party may have suffered due to your business operations.
Professional indemnity insurance in the UK Professional indemnity insurance provides cover for legal costs and potential compensation payments associated with claims against your business for wrongful advice and services, that result in client loss.