General Liability Insurance
Perhaps the most important type of insurance for any business – small or otherwise – is liability insurance. Such a policy ensures that your company is defended against any damage to third parties caused by yourself, your employee(s), or any of your product(s) or service(s). Liability insurance covers legal costs, as well as any legal payouts.
Another essential form of small business insurance, property insurance is necessary to cover damages to a building and its contents. Whether you rent or own the property, this policy will insure you against all sorts of damage, including theft, fire, smoke and general weather damage (though generally such policies do not cover water damage caused by natural catastrophes, such as floods and tsunamis, or other rare occurrences, such as earthquakes and acts of terrorism). Property insurance also usually covers any liability a third-party is injured within the property. If necessary, most policies of this kind can be upgraded to cover any interruption to business or loss of earnings caused by damage to your property.
Commercial Vehicle Insurance
If your company owns any vehicles, then this is a policy you cannot afford to do without. Vehicle insurance will cover any damages to your business’ vehicles, as well as any damaged to its contents, including both employees and the vehicle’s cargo. If your business does not own any vehicles of its own, but instead your employees use their own vehicles, it may be an idea to take out non-owned vehicle liability as an extra precautionary measure.
Employers’ Liability Insurance
Compulsory for all employers in the UK, employers’ liability insurance covers claims made by employees who have suffered physical damage (such as an injury or illness) whilst in employment. Usually, this only applies if proof is found that the proper health and safety regulations have not been followed.
Professional Liability Insurance (also known as Professional Indemnity Insurance)
This policy is a form of liability insurance that covers claims made by third-parties of damages caused by negligence or malpractice. This policy covers any costs incurred if, for example, a customer thinks he/she received improper service(s) from your business. Though it may seem similar to general liability insurance, this is an entirely different type of insurance and it can be just as important. (This form of insurance may also be listed by a different name if industry-specific, i.e. medical malpractice insurance.)
Often overlooked, life insurance is extremely important for small business owners. It is essential for peace of mind: no one would want their loved ones to suffer a financial burden should a fatal accident befall them.
One of the least-known types of insurance, data breach insurance is becoming increasingly popular in a world where hard copies of data are fast becoming a thing of the past, and are being replaced by computer-stored information. If you operate a business with sensitive information stored electronically (or, for that matter, on paper), a data breach policy will insure against damages caused by any such information accessed without your consent.
Directors and Officers Insurance
Usually referred to as D&O insurance, this form of insurance provides cover for a company’s director and officers in the event of a lawsuit. Most commonly, this applies to occasions when such parties are sued for negligence, which has affected the business or its shareholders in a negative manner. It is not intended to cover financial losses caused simply by wrong actions or decisions.
Written by: Shannon James took a placement at one of the largest accountancy firms in the world immediately after university, Shannon then went on to found a company and started investing in property. This has given him an wealth of knowledge regarding all types of business & personal insurance.