What is business insurance? (2024)

Business insurance protects businesses against losses suffered in the course of their normal activities, particularly when the business faces a compensation claim. Covers include professional indemnity insurance, public liability insurance, and employers’ liability insurance.

What does business insurance cover?

Different types of business insurance cover different risks. Public liability insurance covers compensation claims made by a member of the public, while professional indemnity insurance covers you if you’re sued by a client. Employers’ liability insurance covers compensation claims from employees.

Each type of business insurance is designed to cover a different set of risks that you face in the course of running your business.

Public liability insurance can cover your business if a member of the public makes a claim against you for injury or damage. Your insurance can cover the cost of legal fees and compensation payouts, up to the limit of your policy.

Professional indemnity insurance can cover compensation claims made against you by a client because they believe you’ve given bad advice or made a mistake in your work. This can include things like mishandling client data.

Employers’ liability insurance can cover compensation claims lodged by an employee for injury, illness or damage that they’ve suffered due to their work.

You can also choose to cover things like your business building, contents, equipment, tools, and stock in case they’re damaged or destroyed.

Popular trades we insure

At Simply Business we insure all kinds of trades like:

• Builders insurance
• Catering insurance
• Cleaning insurance
• Contractor insurance
• Hairdressing insurance
• Home baking insurance
• Online retailer insurance
• Pub insurance
• Public liability insurance for security guards
• Restaurant insurance
• Roofers insurance
• Takeaway insurance

Is your profession not listed? When you run a quote you can select your trade from over 1,000 options.

Why do I need business insurance?

You need business insurance to protect you against the everyday risks that come with running your business. Business insurance can cover you against things like professional mistakes, accidents, theft, damage and legal fees.

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Is business insurance a legal requirement?

Whether or not you’re legally required to have business insurance depends on your particular business. Employers’ liability insurance is a legal requirement for most businesses that have staff, while other types of cover, such as professional indemnity, may be required by regulatory bodies.

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What type of business insurance do I need?

This depends on the type of business you run and the risks you face.

If your business interacts with third parties – whether that’s customers, clients, suppliers, or other members of the public – then it’s worth considering public liability insurance.

If your business offers advice or a professional service, or if you handle client data or intellectual property, then professional indemnity insurance could be an important cover.

Find out more about the difference between public liability and professional indemnity.

If you have one or more employees, then it’s likely your business is legally required to have employers’ liability insurance. Find out more about the difference between public liability and employers’ liability.

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How much does business insurance cost?

The cost of your policy will depend on several factors, including the nature of the business you run, the type of insurance you need, and the cover levels you choose.

When your premium (the amount you pay for your insurance) is calculated, the insurer takes into account how likely you are to make a claim and how much a claim could cost. Usually, a business that is perceived as riskier will pay a higher premium than a business that’s considered lower risk.

We know that quality, tailored cover is important, but it shouldn’t break the bank. To compare affordable prices for your business insurance, run a quick quote now.

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How much business insurance do I need?

The level of business insurance you need depends on the type of business you run and the particular risks you face.

We offer a minimum of £1 million and a maximum of £10 million of public liability insurance, and between £50,000 and £2 million of professional indemnity insurance.

If you have employees, unless your business is exempt, you’re legally required to have at least £5 million of employers’ liability insurance. We offer £10 million of cover as standard.

When choosing cover levels you should check your contracts to see whether your clients require a particular level of cover, and also check the guidelines from your regulator or professional body. You should also consider the value of your contracts and the scale of your work.

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Does business insurance cover theft

Unfortunately there are many different types of theft and, depending on your business, many things a thief could steal.

If you’re worried about the loss of items such as laptops then it’s business equipment insurance you want to consider. We will cover items kept in most commercial and home offices, as well as if they’re left in a locked car overnight.

If your business has any stock that needs to be protected, you might think about stock insurance, which covers theft, as well as accidental damage.

Additionally, if your customers leave their items with you to be repaired, for example, then stock insurance could pay out if they’re stolen while in your possession.

And if you run a shop, we cover theft in our basic shop insurance package. This includes cash left in the business premises overnight, as well as losses that come about from employee dishonesty.

What is commercial insurance?

Business insurance is sometimes referred to as ‘commercial insurance’. The two terms usually mean the same thing: insurance designed to protect businesses from the risks they face.

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Can I get business insurance before registering my business?

You can get business insurance before registering your business. When you buy your business insurance, you won’t usually be asked for your company registration number or any other business registration details.

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Can I get business insurance without a trade licence?

You can buy your business insurance before you have your trade licence in place yet. However, once you start trading, if your business still doesn’t have the necessary licences, your business insurance may be invalid and claims may not be paid.

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