A business is an investment. You invest your time, money, and confidence into it. Starting a business comes with a lot of risks, which is why you need to ensure that every area of your business is properly insured and taken care of.
Insurance will protect you against any potential risks. There are many different types of insurance. If you own a business, you’ll need at least three different types.
In this article, we’ll tell you the different types of business insurance, and you’ll find out how you can protect your business the right way:
Public Liability Insurance
Public liability insurance is a very important type of insurance. It’s one of the most basic types of business insurance, and it’s an absolute necessity if you intend on interacting with the public. Public liability insurance will protect you from any personal injury claims made by clients, customers, or members of the public. If you operate your business online, then public liability insurance might not be necessary. Most businesses that interact with the public (restaurants, bars, and shops) will have public liability insurance. Those that don’t are playing with fire. If a personal injury claim is made against a business that doesn’t have public liability insurance, it could potentially be driven to bankruptcy.
Professional Indemnity Insurance
If your business gives advice or offers professional services to other businesses, you might need to invest in professional indemnity insurance. If your business handles intellectual property, sensitive information, and client data, then you might also need this type of insurance. If your business makes a mistake and your clients are impacted by it, then professional indemnity insurance can cover you against any compensation claims that are made. It will also cover your legal fees. Some businesses are required by governing bodies to have this type of insurance.
Employers’ Liability Insurance
This type of insurance is also very important. If you employ staff, then you’re legally required to have this insurance. It will cover you against any compensation claims made by staff because of illness, injury, or personal damages. It’s very important that you take this insurance out, even if you discover that you’re not legally required to (some businesses are exempt). If any of your staff do decide to make a personal injury claim, this can be very costly for you and your business. It can even lead to bankruptcy if you’re not covered by insurance.
Buildings Insurance
This is a type of insurance that’s absolutely necessary, even if your business operates from home. Buildings insurance is predominantly taken out for shops, bars, restaurants, and office buildings. If you rent a building, then you will need to discuss building insurance with the landlord before you take out a policy. Buildings insurance will offer you protection against any financial loss incurred as a consequence of interruption or damage to your business because of your building, like graffiti, fire, or damage. If you’re on a budget and wouldn’t be able to afford repairs to your business’s building, then this type of insurance will come in handy.
Contractors Insurance
If you do any form of contact work you need to have contractor insurance to protect yourself or your employees. Contactor insurance will protect you or an employee in case there is damage to someone’s property while you are working for them. It also protects you should you physically injure someone while you are doing contractual work on their property. A large claim that is not covered by insurance has the potential to bankrupt your business so give yourself peace of mind by getting this insurance.
Contents Insurance
Buildings insurance will just cover the cost of repairing the façade and exterior of your business. If your business is damaged by a fire or a flood, buildings insurance won’t cover the interior of your business. For this, you will need contents insurance. Contents insurance will cover the cost of equipment and tools if they are damaged, lost, stolen, or destroyed. This type of insurance will pay you the cost of these tools for replacements. It will also pay for the cost of repairs if repairs can be made. If you didn’t have this insurance and your tools were damaged, you would probably be unable to pay for all of them and keep your business operational.
Product Liability Insurance
Product liability insurance is very important if you manufacture and retail products. This type of insurance will protect you if a customer of yours is injured as a result of a faulty product. Even if you don’t manufacture the product, you could still potentially be held liable, which is why you need to be covered by this insurance if you own any type of shop or eCommerce website. You can be sued for a lot of money if you’re found to be liable for selling faulty products, which is why it’s crucial that you invest in product liability insurance.
Personal Accident Insurance
If you’re a sole trader or you run your business alone, personal accident insurance is definitely something to think about investing in. You can get a personal accident insurance policy very cheaply. This type of insurance will compensate you financially if you’re unable to work because of a serious illness or injury. This type of insurance can be instrumental in keeping your business alive while you’re not able to work. It’s a worthwhile investment to make because it will ultimately keep your business operational. If you were unable to work for a long period of time without financial compensation, there’s a chance your business would fail. With the cash injection afforded by personal accident insurance, you don’t ever have to worry about your business closing because you’re sick.
Business Interruption Insurance
If your business is interrupted by damage, such as a flood or fire, business interruption insurance will provide you with financial compensation. This financial compensation will get you back on your feet and help you to keep your business operational. This type of insurance is typically taken out in conjunction with buildings and content insurance.
Legal Protection Insurance
As a business owner, you never know when somebody is going to try and take legal action against you. Legal protection insurance will cover your legal expenses and cover any costs associated with them. This type of insurance will pay out whenever you find yourself in any situation where your business has to pay for its legal defense. Legal protection policies are not usually very expensive and they’re a worthwhile investment into the future of your business.
It’s fair to say that insurance is very important for your business. If you care about your business’s future and the time and money that you have put into it, then you need to invest in insurance.