If you have your own business, you may be bewildered by the range of commercial insurance you need. Some of these forms of insurance are required by law, whereas others might be stipulated by various professional bodies in order for you to practice. In other cases, insurance is advisable though not mandatory.
Types of commercial insurance
The wide range of sub-types of commercial insurance means that it is worth gaining specialist advice to make sure you are properly covered. Some of the most common kinds are summarised below, though the list is not exhaustive.
Employers liability insurance is mandatory, except in very restricted circumstances. Under the law you must arrange cover of at least £5 million. Employers liability insurance protects you against claims from employees that arise in the course of their work. These can include accidents and injury, but also harassment, discrimination and wrongful dismissal, amongst other things.
Public liability insurance provides cover for claims that arise from third parties or members of the public (who are unconnected with your business) in the course of your work. For example, you might need to pay costs in the event of an accident that is your fault that results in injury to a person or damage to property.
Professional indemnity insurance is generally required by those who provide advice in the course of their work. This covers you for claims that arise when that advice is, or is perceived to be, deficient in some way. It is often associated with lawyers and architects, but is a type of commercial insurance applicable to a much wider list of professions.
Directors and officers insurance protects key members of a company from decisions they make as managers. This is important because a claim can be brought against both individuals and a company itself; directors and officers can be held personally liable for decisions made on behalf of the company, meaning their own assets are at risk. D&O can cover you for mistakes made by previous as well as current directors.
Premises insurance. If you have separate premises you will need to organise cover for the buildings and contents. There are various additions for special circumstances, for example if you keep a large amount of cash on the premises. If you work from home then you will need to consider how this affects your home insurance. In some circumstances it will not matter. Generally, though, if your work raises the risk of damage or burglary (perhaps because there are more people coming to your house) then your insurer will be reluctant to cover you without raising your premiums. Similarly if you are keeping valuable equipment or stock at home, you will need to change your policy.
Vehicle insurance. This is mandatory for any driver, but you must also make sure that they are covered for business usage if they are driving their personal vehicles in the course of work. If you are transporting products, you should also consider goods in transit cover.
Personal insurance. There are various kinds of personal insurance you might want to think about if you have your own business. Life insurance is an obvious one, but critical illness cover could also be important (this can often be purchased on the same policy.)
Combined commercial insurance policies
There are many different kinds of commercial insurance, and purchasing individual policies can be expensive. One cheap way to go about acquiring all the different types of insurance you need is to get a combined commercial insurance policy. This allows you to access economies of scale and create a bespoke set of policies that is right for your requirements from a long list of types of cover.