small businesses

What insurance does your small business need?

Starting a small business requires tireless effort and endless financial reserves. Besides dealing with necessary tasks to start the business—affording exorbitant start-up costs, establishing a customer base, forecasting cash flow problems—new small business owners are besieged on all sides by risks.

The only sure-fire thing you can count on during the tumultuous beginning stages of your business or later in its development is the protection offered by commercial insurance. Avoid losing everything to a disaster that you could have easily insured—purchase robust and comprehensive commercial insurance to keep your small business protected on all sides.

Essential Covers

Small businesses vary widely in their insurance needs. Many different factors—including industry, location and size—will determine the type of insurance your business needs to survive. There are some insurances that you are legally required to take out. If you don’t, you could be subject to a heavy fine and put your entire operation at risk. The key insurances for a small business are as follows:

  • Employers’ liability is mandatory for all UK employers. It covers employers’ liability for bodily injuries or diseases their employees may suffer in the course of their employment. This is law and your insurance certificate must be displayed where your employees can see it. Cover of at least £5 million is required by law for limited companies and you can be fined up to £2,500 for EACH day you aren’t covered. You won’t need it, however, if you are a limited company with just one employee, who owns 50% or more of the share capital (i.e. yourself). If you are a sole trader and don’t have any employees, or you only employ close family members, you should also be exempt. Even if you don’t have any full-time employees, and just occasionally hire staff or use temps or seasonal worker, you must take out cover. (source:
  • Motor vehicle insurance (at least third-party) is a legal requirement if you operate company vehicles. If you’re using your own van or car for your business, make sure you let your insurance provider know.
  • Buildings insurance for you property protects your commercial property, buildings and contents from a broad range of risks. Although not a legal requirement, it certainly makes sense to take out cover.
  • Business interruption or business continuity insurance recoups lost profits in the event that insurable property damage causes your business to temporarily close. You should aim to cover events not already included in your other insurance policies.
  • Public liability covers your liability for third-party injury and property damage arising from your business’ operations. It is not required by law, but if members of the public come to your premises, or could be hurt in any way by something your business does, it’s probably a good idea to take out this cover.
  • Products liability insures against damages and costs arising from accidental injury or damage caused by products supplied by your business.
  • Cyber liability provides protection against a host of cyber threats, including hacking, stolen data and system failure.
  • Directors and Officers (D&O) insurance covers the legal liabilities you have as a director of a limited company and any legal costs if you get something wrong.

This list is not exhaustive. Depending on your specific business, you may need to consider additional cover options to fully protect your business.

Additional Covers to Consider

Carefully consider the needs of your business—is there anything unique about it that would require additional insurance protection? Consider the following additional covers. Many businesses cannot afford to go without them.

  • Motor fleet
  • Goods in transit
  • Legal expenses
  • Theft by employee
  • Equipment breakdown
  • Stock
  • Loss of money
  • Trade credit
  • Professional indemnity
  • Crime
  • Key person

Part of investigating available insurance covers is determining the points where your business is weakest. Pinpoint the spots where your business is the most vulnerable, and secure insurance that bolsters those vulnerabilities. For more information on any of these types of cover please contact your local insurance expert today.

Trust the insurance professionals at A-Plan to help find you the right business insurance cover at the right price.