Is business insurance a ‘must have’ or a ‘nice to have’?
HOME / / Is business insurance a ‘must have’ or a ‘nice to have’?
Your business will face different risks depending what it does.
Whatever product or service you provide to your customers, it’s vital that you protect yourself and your business from a major financial loss if someone files a claim against you.
We previously outlined eight essential insurances for small businesses. But there’s a few more types of business insurance you might want to consider.
Our partner Superscript provides business insurance specifically designed to fit small businesses, so here's some examples to help you choose whether to put business insurance on your startup shopping list.
Some of the most popular covers are:
Public liability insurance
Employers’ liability insurance
Professional indemnity insurance
After that, it’s well worth looking at whether your business requires the following:
Building and contents insurance
Stock insurance
Home business insurance
Other benefits to business insurance…
Access to professional groups
As well as peace of mind that you are protected financially in the event of a claim, some professional bodies or trade associations require you to have specific insurance in order for you to become a member. Others may offer cover as part of their membership or for an additional fee.
A trade association is made up of members who all work in a particular industry.
Examples include National Federation of Roofing Contractors, Association of Plumbing and Heating Contractors and Association of British Travel Agents.
Important note for side-hustlers!
It’s critical you have the appropriate cover for your self-employed work separately to any work you do for an employer.
For instance, a physiotherapist who works three days a week for the NHS is likely to be covered on those days by NHS insurance.
But they still need to get their own insurance so they're covered for the days they work as a freelancer and see private clients.
Build trust with your clients
Having the right insurance in place can really set you apart from your competitors, giving potential clients peace of mind, especially when entrusting their business to you for the first time.
It’s a mark of true professionalism that you’ve done your research and have invested in protecting your assets. Respect!
Which types of business insurance am I legally required to have?
In the UK, businesses that employ other people are legally required to get employers’ liability insurance. There are a few exceptions, but you’re likely to need this whether you have one or 100 employees, regardless of whether they are full time, part-time, or temporary.
Employers’ liability insurance covers you for compensation costs if an employee becomes ill or injured because of the work they do for you.
It’s not just accidents at work that you need to insure against - repetitive strain injuries or chronic illnesses can lead to expensive legal fees.
Do you interact with other humans?
If you interact with any members of the public as part of your business, then you may want to consider public liability insurance!
Even for the safest of businesses, there’s always a risk that someone could get injured, or something they own could get damaged.
A customer could trip over in your shop, or you could accidentally drop something on a client’s computer.
Public liability insurance covers you for legal expenses in case a third party decides to sue you.
If you’re required to pay them compensation, your insurance will cover that too. Phew!
Unfortunately, being “really careful” isn’t good enough
People aren’t perfect. If you make a mistake and a client ends up losing money as a result, they can claim you’ve caused them “financial damage”. This includes a breach of data protection, copyright infringement or damage to their reputation. To get protected against these risks, look towards professional indemnity insurance.
Whilst it’s not a legal requirement, it’s in Transmit’s top three because every business from financial consultants to engineers and even graphic designers should consider it.
What other types of business insurance might I need?
On top of public liability, employers’ liability and professional indemnity insurance, you might have heard of covers such as:
● Buildings and contents insurance (protect the physical space you run your business from, and the stuff inside that’s important to you)
● Stock insurance (the products you plan to sell, and the raw materials or ingredients you’ll need to create them)
● Vehicle insurance (important if transport is part of your business)
● Home business insurance (if you run your business from home)
Insurance for the digital age
Thanks to Superscript, we’ve learned about two further types of business insurance which apply to more and more businesses as digital transformation spreads across every sector.
Cyber liability insurance
Even with the best anti-virus software and the longest possible passwords, hackers can infiltrate your computer and access your data and that of your customers.
Cyber liability insurance covers you for data protection fines or financial losses suffered due to a breach.
Media liability insurance
If you publish content online as part of your business, media liability insurance protects you for IP infringement, breach of confidentiality, right to privacy, and breach of comparative advertising regulations.
Media liability insurance protects you for negligence in all your media content, including websites, blogs and on social platforms.
Investing in this insurance means that any legal fees and compensation will be taken care of should a social post backfire.
Say 'hello' to our sister company Smarta
For more helpful information to help you choose the right protection for your small business, plus the latest offers, visit Superscript's product page on the Smarta Community.
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