Small Business Insurance — What Do You Need?

Are you a small business owner? The owner of a small business, that is — your personal dimensions are irrelevant. You know how difficult the current business climate is, so you need all the back-up you can get — and that includes business insurance.

So what types of insurance do you need for your business? Well, for a start, there are two that are compulsory if the conditions apply to you. If you have any employees, even a single one employed on a part-time or casual basis, you must have Employer’s Liability Insurance. This has to be worth at least £5million and obtained from authorised insurers or specialist brokers through the British Insurance Brokers’ Association.

At the same time, if your company operates one or more vehicles for business purposes, you’ll need Commercial Motor Insurance. Like normal cover, this can be for third party only, third party, fire or theft, or comprehensive, and special policies are available for vehicles such as HGV, taxies, trucks and vans.

These won’t necessarily apply to all business, however. If you’re a solopreneur, for example, you won’t need Employer’s Liability Insurance, while if you simply use your own car to get to meetings and appointments, that can be covered by normal motor insurance — as long as you inform your insurance company.

What Other Insurance Might a Small Business Need?

Those two types of insurance are legal requirements, and you can face heavy fines if you don’t have them, but there are other types of small business insurance that are just extremely advisable. These include:

  • Professional Indemnity Insurance, protecting you against claims of negligence in services you offer.
  • Public Liability Insurance, protecting you against claims for bodily or property injury resulting from negligence in your business.
  • Product Liability Insurance, protecting you against claims of damage or injury caused by your products. This is obviously unnecessary if you only provide services.
  • Business Interruption Insurance, protecting you against downtime after fire, flooding or other damage. This may be a clause of the commercial property insurance for your premises.
  • Cyber Insurance, protecting you against loss resulting from cyber attacks — today, one of the most dangerous threats to a business.

This is by no means an exhaustive list. As mentioned, you’ll need commercial property insurance for any premises, and you may want to offer perks for your employees, such as income protection insurance or private medical insurance. There are also insurance policies available against financial risks.

Allied Claims would strongly recommend that you go through an insurance broker specialising in small business insurance, who will explain what you need and what you don’t. And then, if you need to make an insurance claim on one of the policies, we can help ensure that the insurer’s loss adjuster has no reason to turn you down.


All content within this column is provided for general information only, and should not be treated as a substitute for the Insurance advice of your own broker or any other Insurance professional. Allied Claims is not responsible or liable for any decisions made by a user based on the content of this site.

Allied Claims is not liable for the contents of any external internet sites listed, nor does it endorse any commercial product or service mentioned or advised on any of the sites. Always consult your own Insurance broker if you’re in any way concerned about your insurance cover.