Types Of Business Insurance
The 6 types of business insurance
1. Property Much like home insurance, there are policies to protect business buildings and their contents from theft, fire and some forms of natural disaster. It’s common for a business to have all its assets in one building, so this type of insurance is popular.
2. Vehicle Most of us have had motor insurance at some point. It works the same for business vehicles, covering loss and damages due to accidents or theft. It should include care for injuries and some protection against lawsuits by other drivers.
3. Public liability This kicks in if your business causes loss or damage to other people’s property, makes someone ill, or injures a member of the public. This type of business insurance can also cover punitive damages, where a court orders you to pay extra money over and above compensation.
4. Workers’ compensation If you have staff, you’ll be required to carry this type of business insurance. It provides financial help if an employee is injured or killed on the job. It’s not a substitute for good health and safety practices – you’re also required to make the workplace as safe as possible.
5. Professional liability If you make a mistake in your work that causes harm to others, you can get into a lot of trouble. Professional liability insurance helps you cover the economic damage. This kind of policy is often compulsory for businesses that give legal, medical, engineering and financial advice.
6. Business continuation If your business is closed down or slowed down for reasons you can’t control, business continuation insurance can be handy. Depending on the policy, this type of business insurance can replace some lost income and provide cash to get you back up to 100% capacity sooner.
Getting started with small business insurance
Take time to think about what you need. Under-insurance is a massive risk, but over-insurance is an unnecessary cost. Don’t go straight to an insurance broker. Speak to other business owners and an accountant first. They’ll have great practical advice.
Reviewing your types of business insurance
Review your insurance regularly. Your risks and responsibilities will change over time, so check you’re on the most cost-effective policy bundle. Pay particular attention if you change your business structure from, say, a sole trader to a company.
Powering through a disaster
Being prepared and being insured are two different things. Consider making a business continuity plan to help steer you through difficult events – from natural disasters to the loss of a major client.