New businesses are likely to require a number of different types of insurance. Some are compulsory:
- employers' liability insurance cover - worth at least £5 million - for most types of employees
- motor insurance if your business uses vehicles on the road or other public places
- professional indemnity insurance for businesses in professions such as law and accountancy
Other types of insurance your business may require include:
- buildings and contents insurance
- equipment insurance
- key person insurance and health insurance for the owner-manager
- life and health insurance for employees
- directors' and officers' liability insurance
- business continuity or business interruption insurance
- public liability insurance
- product liability insurance
- goods in transit insurance
- credit insurance
- fidelity insurance - which protects against dishonesty or theft by staff
- travel insurance
- legal expenses insurance
- money policies
The Association of British Insurers (ABI) provides further information on business insurance.
It's important to monitor your level of insurance cover as your business develops. Schedule an annual review to consider how your needs have changed. Weigh up the cost of the premiums against the level of risk you're running.
An independent insurance broker can help you select the right level of cover, assess which risks pose the greatest threat and find the best deal.
Some brokers charge a fee for their services but most obtain payment from the insurance companies they tell you about. If you purchase products or services from insurance intermediaries, you have the right to ask how much commission they receive for selling the product or service to you.
Although you can buy cover directly from insurance companies, it's generally best to use a broker, as they can provide advice and assess your insurance needs. If you choose to deal directly with an insurer, check they are a member of the ABI.
It is also worth asking your broker what Professional Indemnity or Errors and Omissions insurance they have in place themselves, in case an error by them leads to you not having the right coverage when you claim.