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Article on: UK Small Business Insurance
Insurance on a Small Business | Insurance for work
Insurance on a Small Business is there to help protect you against life’s unexpected situations you could face in today’s unpredictable business world.
Situations which ultimately could lead to claims against you for damages or a loss of business profits and earnings, all which could seriously impact your small business.
We will look at how Insurance for work is a necessity not a luxury.
As brokers we know the ideal insurances on small business could help you to maintain your status, if you had to unfortunately close down for a period eg; a fire, flood, damage or theft of tools & equipment.
Then the correct insurances on small business may also help you to get going again, along with the right business support.
General Insurance for Business
‘What Insurances do Businesses need’?
Well these various types of cover for insurance on a small business may include:-
- Employers Liability – is a legal requirement if your business has any employees ie; protects you against claims made against you
- Public Liability – financial cover if your business is responsible for injuring the public, or damage their property
- Professional Indemnity – protect yourself against compensation from your business, for any bad advice, service or work
- Equipment & Stock – insure your business stock, tools, technology & machines
- Buildings & Contents – protect your business property & contents ie; a fire, flood, accidental damage or theft
- Life Insurance – cover yourself & any business partners for any debts, loans or business mortgages if you died
- Critical Illness – protects you and/or business partners if you were diagnosed with cancer, had a heart attack, stroke, ms etc;
- Income Protection – ensure you have an ongoing income if you are off work due to an accident, sickness, hospitalisation
Although some of these insurances on business are not legal requirements, some clients or lenders may require you to have this in place when working with you or lending you money.
Insure Small Business
If you run a small business, what types of trades insurance on business are usually covered?
- Trades like Plumber, Electrician, Handyman, Painter, Decorator
- Professions like Vet, IFA’s, Solicitor, Accountant
- Sole Traders like Freelancer, Bookkeeper, Photographer
- Shops like Cafe, Restaurant, Menswear, Corner Shop
- Commercial like Offices, Bed & Breakfast, Garage
So what insurances for business may need are many & varied, whether you are just starting out or been trading for years. Let’s now have a look at the various insurance for work areas when looking to insure small business.
What is Insurance Liability?
What is Insurance Liability? It means you are liable for the costs of any compensation claims made against you following any fault of negligence, whether by fault or no fault. This can be brought against your small business by your employees, by clients, by customers or by members of the public.
You only have to listen to the radio & TV to hear the numerous adverts praying on the no win no fee compensation culture, which perhaps has mirrored what already happened in the USA.
An Insurance Liability policy usually covers the cost of compensation to a 3’rd party for:
- personal injury, loss of or damage to person or property
Insurance Liability will also help to cover some of the legal fees arising from any compensation claims. However, some Insurance for work plans may not cover all of your legal expenses. So, check carefully to ensure your Insurance Liability policy adequately also covers legal expenses.
*Employer Liabilities Insurance UK
The Government make Employer Liabilities Insurance a legal requirement as soon as you become an employer. Here your general insurance for business policy must cover you for at least £5 million & come from an FCA authorised insurer.
They also state that you may not need employment liabilities insurance if you only employ a family member or alternatively someone who is based abroad.
*Employers Liabilities | Legal Fines
You can be legally fined …
- £2,500 every day you are not properly insured
- £1,000 if you do not display your employment liabilities insurance certificate
- £1,000 if you refuse to make it available to inspectors when they ask.
What is Employer Liabilities Insurance?
What is employer liabilities insurance? Well it is an insurance for work that helps cover the cost of compensating your valued employees who are unfortunately injured at work or become ill through working for you, their employer.
The cost of your employers liabilities insurance uk premium is based on several underwritten insurance risk factors including:
- Nature of your business or industry
- Number of people/staff you employ
- Work environment safety
- Training & awareness
- Previous claims history
As mentioned, legally insurances on business means you have to cover compensation for at least £5 million, but many employer liabilities insurance policies offer cover for at least £10 million.
Your employment liabilities insurance policy should help to cover any claims brought by:
- All your permanent employees (who have tax & NI deducted from their wages)
- Any contract, casual and seasonal employees (whose work location, work hours and work conditions are controlled by you, their employer)
- Labour-only subcontractors (who cannot be ignored & replaced by you, their employer if they can’t work)
- Temp staff eg; students, work placement, volunteers, advisers, referees & marshals
Employee Liabilities Insurance
What is employee liabilities insurance? If you are a work employee & you believe you have suffered an accident, an injury, become ill or been hospitalized due to, or as a result of, your job or occupational working role.
In this situation, you should immediately speak to your boss or employer. They will then take down all your details & your circumstances, who should then contact their insurer about making a compensation claim.
If your employer has interim or in the middle of a claim gone out of business, you may still be able to make a claim for employee liabilities insurance compensation, directly via their insurer. You can trace your former employers liabilities insurance uk provider through the Employers Liabilities Tracing Office (ELTO).
As brokers, we can help you cover your particular trade or business insurance for work via a competitive employee liabilities insurance cost deal.
What is Public Liabilities Insurance? (PL)
What is Public Liabilities Insurance? If a member of the public or customers claim they have experienced personal injury or damage to their property, as a result of your company or its workmanship.
Should an accident happen on your business premises or alternatively if you or your employees are travelling off site & working elsewhere. The more regular the contact any small business has with their clients and members of the public, then the greater chance there is for any claim to be made against your business. Sadly, that’s the nature of the business world. PL cover is a general insurance for business that most owners understand is a must have.
In the business world, accidents can happen ….meaning any business could face expensive compensation claims & related legal fees, whether you’re a sole trader or own a small business. You could be put out of business by an accident, error or mistake.
Some clients you work with may ask to see your building liabilities insurance, as part of their contract terms eg; your cleaners damage a client’s carpet, your plumber causes a leak to a flat which then affects several other flats, customer slips on your newly cleaned floor etc;
A public liabilities insurance uk policy is designed to help cover any compensation claims or legal costs and therefore protect your business against unforeseen claims & costs. Insurance for work may not be a legal requirement, but it makes sense to have this type of insurance on a small business.
Public Liabilities Insurance Cost | Cost of Insurance for Business
What affects public liabilities insurance cost? Well several factors affect public liabilities insurance quotes including…
- Size of your business
- Business Industry
- Business Type
- Claims History
- Business Location
Ultimately, like any insurances on small business any that are perceived as a higher risk of claim, then they will usually pay a higher price for their public liability insurance.
As general insurance for business brokers, we can help you cover your particular trade or business via a competitive public liabilities insurance cost deal. The cost of insurance for business maybe less than you think.
Indemnity Insurance Business
What Professional Indemnity Insurance? (PI)
What professional indemnity insurance (PI) can offer is cover for your small business if any customer claims you have been negligent, offered bad advice or just made a mistake.
PI Indemnity insurance business may also cover you if any supplier or subcontractors affects your professional business activities & they then let your business down in say any of the following circumstances.
A typical professional indemnity insurance may cover these key insurance for work areas:
- Duty of Care Breach – poor conduct causes bad client situation
- Professional Negligence – bad advice causes bad client outcome
- Negligent Misrepresentation – claims you have made a false or misleading statements about another parties business
- Copyright Breach – you intentionally (or not) use someone else’s intellectual property rights in any works you do for a client
- Defamation – any statements you have made that are untrue & so damage another persons or businesses reputation
- Confidence Data Breach – whether accidental or not, personal information is disclosed without your client GDPR consent
- Loss or Damage – cost of recovering client data or intellectual property documents
Some of the factors PI insurance brokers consider & affect the cost of insurance for business when comparing professional indemnity insurance are…
- Industry legal requirements
- Size of your liability
- Types of clients
- Potential damages
- Number of Employees
Insurance for Directors and Officers
Small business directors and officers usually have specific duties, responsibilities & powers relating to their positions. These are usually set out in their job role description or terms of reference.
If a small business director or officer of your company is then found to have acted outside of their legal terms of reference then either legal proceedings can be brought against them.
Insurance for directors and officers is a specific liability insurance that helps covers the cost of compensation claims made against your small business directors or key officers for alleged wrongful acts.
Wrongful acts may include:
- breach of trust or duty
- neglect or error
- wrongful trading
- misleading statements
Insurance for Directors and officers usually doesn’t cover claims made against your organisation as a whole. It just covers those made against individuals for alleged wrongful acts carried out in their capacity as directors or officers.
So insurance for Directors and officers liability insurance helps cover the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful legal defence. It may be sold as a standalone plan or an additional policy feature which maybe cheaper re cost of insurance for business.
In conclusion
These various insurance for work may sound similar but what is a professional indemnity insurance (PI) in comparison to a public liabilities insurance (PL) policy? Insurance PI cover may help protect your small business against any professional negligence or errors.
However, PL Insurance may help protect your business from claims against injury to a customer, or damage to their property due to your business activities.
Trade Insurances
‘Trades Man Insurance’
What is trades man insurance or tradespeople insurance? Well it can cover all the insurance on business areas we have covered so far either within one package or with add on’s.
So it may cover Public liability, Professional indemnity, Employer liabilities insurance plus Business interruption, Tools & stock, equipment & property, Goods in transit, Hired-in equipment & machinery, Tax audit plus
Trades man insurance can also be typically for any one man band small business working in trades like – electrician, plumber, handyman, builder, tiler, roofer, bricklayer, painter & decorator.
Value for money wise, it maybe cheaper to buy a packaged tradespeople insurance, re cost of insurance for business, than buying them all separately.
Note: If you are a contractor, you should also check your policy terms re using sub-contractors (if they do work unsupervised for you). They could need to have their own seperate insurance for work via trades man insurance sub-contractors cover.
If alternatively they only do supervised work, they should be covered by the main trades man insurance on business policy.
‘Insurance for a Business’ | ‘Builders Insurance Quote’
There are many different types of insurances on small business, specifically tailored for builders. From public liabilities insurance & employers liabilities insurance through to contract works, machinery or plant. We can help if you are looking for a competitive broker Builders Insurance Quote?
Your ideal Builders Insurance can help give you peace of mind in your daily business life & work, without worrying about any potential customer liability claim issues. Your business trade quotes can confidently state that you are fully insured.
Checkatrade agree that you can proudly display your builders insurance quote & accreditation on their website. They state it is the perfect way to show potential new customers that you’re willing to go the extra mile to offset the cost of insurance for business.
‘Insurance for a Business’ | ‘Insurance for Electrician’
Looking for competitive Insurance for Electrician? Business life as an electrician is unpredictable & sometimes physically demanding. You maybe an experienced electrician, with a safety first mentality but sadly accidents & incidents do happen.
Things can happen you hadn’t anticipated for at the start of your working day eg; some or all of your tools are lost or stolen from your van, how are you going to carry on your job? A customer decides to sues you for an injury caused after you fixed their dodgy wiring several months ago, can you afford their claim for any legal or compensation fees?
If your answer is well that is obviously why I am looking for Insurance for Electrician, then as brokers we can help you cover your particular electricians trade. We can quote you for insurances on small business – public liability, tools insurance, legal claims, tax audits etc; via a competitive cost of insurance for business broker deal.
‘Insurance for a Business’ | ‘Plumber Insurance UK’
As a plumber, you could spend your day helping fix burst pipes that your clients may have claimed for on their own property buildings insurance. Whilst the quality of your workmanship maybe high, the reality of your business life as a plumber means it is not all plain sailing as accidents can & do happen. You could perhaps cause a secondary problem, whilst sorting out the primary problem for example under trace and access.
As brokers we find typical insurance claims for plumbers naturally relate to unforeseen water ingress and damage to a customer’s property during the course of your repairs. Water decides where it wants to go & sometimes that could be expensive for you. Without insurance, could you afford to pay the total costs caused by any damage in any claims made against you?
We can quote you for insurances on small business – public liability, tools & equipment insurance, legal claims, tax audits etc; via a competitive broker general insurance for business deal all to help you protect and cover your particular plumbing trade.
‘Fleet Insurance for Business’
If you run a small business with several or more vehicles, whether they are cars, mini vans, coaches or bigger, then keeping them correctly insured & maintained can be hassle.
As fleet insurance brokers, we know things can harder if you also have multiple drivers, who may possibly drive some or all of your different fleet vehicles.
Therefore a one fleet insurance for business policy could be your best option for covering all your vehicles, and all your drivers under one roof.
Rather than try to compare online, instead let a fleet insurance broker use their insurance for work expertise to compare insurers for your small business, from as little 2 vehicles upto 100’s.
‘Insurance on a Small Business’ | Life Insurance
Apart from all the usual day to day insurance for a small business already mentioned, often you may forget that there is ‘only one you’ to run your business operations. However you have legally set up your business, Sole trader, Ltd Company or Business Partnership.
But if you have dependants or business partners, then life insurance to insure small business owners is designed to financially help those left behind – cope with the day to day money worries & stress that may happen when losing a loved or one business partner.
There are many different types of small business life insurance, all set up to suit all different sorts of needs. Lump Sums or Income Benefit? Level or Increasing? Single or Joint Life?
1] Small Business Loan Protection
Small Business loan protection, can help to insure: small business loans or mortgages, any small business overdrafts, debts or guarantees. It maybe banks or lenders require that you have to consider the cost of insurance for business for this?
2] Relevant Life Insurance
Relevant Life policy is a tax efficient way of offering small business directors ‘Death in Service’ benefits. Life insurance policy benefits can be made payable to family dependants (rather than paid direct back to the business). They can use the funds to maybe help repay a mortgage or help cover ongoing expenses.
3] Key Person Insurance
Many small businesses have several key persons who make them tick & so stand out from the crowd. This life insurance for work policy is aimed at protecting your small business against losing these star ‘key personnel’ ( whether Keyman or Keywoman) if they died, or alternatively are diagnosed with a serious critical illness.
Insurance for a Small Business | Critical Illness
The running of any small business often relies on you being fit & healthy. In other words, we often take good health for granted. However, how would your business cope if you were seriously ill?
Critical Illness Insurance cover pays out a tax-free sum to help protect & insure small business owners should you suffer a critical illness & become seriously ill as diagnosed then specified by the Insurers plan terms.
A Critical Illness ‘Tax Free Sum’ could help you pay off…….
- Small Business Debts, Mortgages & Loans, Credit cards
- Adjust your Business Lifestyle & Home
- Pay toward any urgent Medical Treatment
- Holiday of a Lifetime when you recover – or put away just for that rainy day
From this basic list and whilst you recover you can therefore decide how much critical illness insurance for work do you need?
‘Insurance on a Small Business’ | Income Protection
When you run your own small business, you don’t tend to take time off work when you are feeling abit under the weather.…you often cannot afford to.
But what happens if your physical job requires you to be 100% physically fit but now suddenly you aren’t ie; you cannot safely work & perform your job anymore. Not me you say, I am always fit and healthy. Maybe the pandemic has changed this attitude?
Income protection ‘PHI Insurance’ or Permanent Health Insurance is a valuable sickpay insurance policy that helps provide a tax free income back up plan. It pays out if you are unable to work through accident, illness or injury to help cover your regular small business bills & outgoings.
You decide the waiting period before you want the insurance payment to payout eg; 1 day, 1 week, 1 month and how long per claim eg; 1 year, 2 years, 5 years or to retirement. All these different factors will affect the cost of insurance for business premiums you pay ie; the earlier you want the payout and the longer the claim period, then the higher the cost.
Unsure how to choose the right small business protection insurance policy? As insurance brokers, we can help you arrange your ideal PHI cover to insure small business.
Conclusion | Quote for Business Insurance
Life can often interrupt the best laid business plans.
Plans impacted by business liability & indemnity issues or property damage, causing your small business to unexpectedly falter. Plans that can all be affected by the sudden accident, critical illness or death of the small business owner, director and any key employees. Contact us below for a quote for business insurance for a small business | broker help & friendly professional advice.
Sorting out your ideal business life insurance cover may seem a difficult task, so don’t do it alone. It’s a good idea to get professional advice from an expert – looking for ‘Insurance for a Small Business’we’re here to help.
‘Insurance on a Small Business’ Article by Martyn Spencer Financial Adviser (2024)
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'There is...ONLY 1 YOU' 
