What’s covered?
Small business insurance may cover a lot of the main areas where your business could be/become financially vulnerable. Among other things, it can often protect against:

• Claims for compensation or damages due to the failure or negligence of your company
• Disputes related to employee/employer issues
• Law suits/claims brought against your company related to work damages
• Damage of office space by fire, flooding or other natural disaster
• Protection of your office equipment from accidents and damage
• Damage to inventory and stock

Any business entity can typically apply for insurance for their small business. The best thing to do is to think about the ways that your company might be vulnerable, identify your insurance needs and then find insurance that matches those needs. The fact of the matter is that no-one else will know which type of insurance and how much cover is necessary for your company but you. When you are researching and looking for insurance, you will most likely have quite a few options. Resources such as the Internet give you the freedom to compare each of the policies you find to the needs of your business.

Signing up for business insurance

Businesses can sign up for small business insurance these days online without ever having a face-to-face with an insurance agent. In some cases, using a small business insurance specialist website can provide details of the some of the cover available for you. If you decide to take the cover, you will most likely be required to provide business registration information and you may have to mail or fax copies of official documents as well.

A surprisingly wide range of your business investment can be insured – indeed, some features and activities are required by law to be covered by adequate and appropriate insurance. For example, any vehicles used in the course of the business must be properly insured and this means that the relevant policy or policies recognise that the vehicles are used for the purpose of the business. The legal requirement, of course, is to protect any third parties who suffer loss, damage or injury as a result of the vehicles’ use, but more comprehensive cover will also be needed to safeguard vehicles of any value.

If you employ staff, a further small business insurance that will be typically required is employers’ liability insurance, which indemnifies the business against claims from employees who have been injured at work or contracted illnesses as a result of their employment. Fines of up to £2,500 a day could be imposed if you take on an employee without the requisite employers’ liability insurance.

If you are in the business of providing professional services – such as a solicitor, accountant, financial adviser, architect or surveyor – registration with the necessary professional body or regulating institution is likely to require that your business holds professional indemnity insurance to safeguard both you and professional standards generally against clients’ claims arising from mistaken or negligent professional practice.

Although it is not a legal requirement, many small businesses could find it difficult to operate at optimum efficiency without public liability insurance (typically covering a maximum liability of up to £2 million). This is designed to cover the business against claims from clients, customers, or members of the public who suffer loss, damage or injury, either on or off the business premises, during the course of any activity (or failure to act) on the part of the business.

A critical small business insurance, of course, is the protection of the business premises from the range of risks generally covered by standard buildings insurance policies. These will cover such perils as storms, floods, fires, explosions, vandalism and damage caused by vehicles. If you occupy the premises as a tenant, the landlord will normally be responsible for such cover, but it is worth bearing in mind that if the premises are a shop, the tenant is usually responsible for insuring the shop-front.