Understanding different types of insurance for small and medium sized businesses

Running a small and medium sized business comes with everyday risks. It is important to ensure that your business is sufficiently covered to avoid incurring substantial losses, in the event of a disaster. In this article, you’ll learn the different types of insurance for small and medium businesses that you should consider.

Public liability insurance

If your business interacts with members of the public and customers on a regular basis, you need to purchase public liability insurance. This type of insurance will cover your business’s legal costs and compensation payments when sued by a third party for damage to their property or for an injury. Although having public liability insurance is not mandatory in the UK, you may be required to have it when applying for contracts in the public service. The coverage comes in handy if various unfortunate incidences occur, such as:

  • When a client slips on your shop’s wet floor
  • A member of the public gets injured in an accident that was caused by your employee
  • When your working partner gets injured
  • When your buildings or tools get damaged

Professional indemnity insurance

If a client sues your business for a mistake that causes him or her to lose money, professional indemnity insurance will protect your assets. So, if you’re into the business of providing advice, handling sensitive client data or simply providing a professional service, you need this coverage. This type of insurance is designed for professionals such as financial advisers, accountants, solicitors, and architects. Professional indemnity insurance covers various issues including when a client sues you for defamation, breaching confidentiality, erroneous financial advice, and faulty architectural plans.

Employers’ liability insurance

Businesses with one or more employees are legally required to have employers’ liability insurance. The policy protects your business financially by covering claims made by your employees as a result of injuries they sustained while at the workplace. This applies to all members of staff including part-time and full-time employees, contractors and casual workers.

Vehicle insurance

You need specific insurance coverage for your vehicles if you use them during and as part of your work. The policy is designed for business owners that use their vehicles for delivery work, travelling to business training, attending business-related events, and carrying passengers. When taking out the vehicle insurance policy you’ll be asked how you intend to use your vehicles, and the common options include business use, commercial travelling, and social only.

These are just some of the most important types of insurance for small and medium businesses you should consider. Depending on your type of business, you might want to consider other types of insurance options such as cyber insurance, buildings and contents insurance, stock cover, and high risk insurance. Protect your hard-earned money and assets by investing in sufficient business insurance today.