Business insurance: the basics

Insure against common business risks


All businesses are vulnerable to a range of common threats - from fire, theft and equipment failure to unpaid bills, loss of cash or cheques and damage to goods in transit.

Types of insurance to consider

  • All-risks buildings and contents insurance protects against a range of risks, such as fire, flood and theft. The right level of cover is likely to depend on whether you own or lease your premises and the value of your buildings and contents.
  • Equipment can be insured for the cost of replacing an item or its current worth, taking wear and tear into account. You can also get policies to protect machinery and IT equipment against breakdown.
  • Business interruption or business continuity insurance compensates you for costs incurred and loss of profits after a disaster such as fire or flooding or an IT system failure.
  • Goods in transit cover protects the value of goods lost or damaged when in your vehicle or sent by a carrier.
  • Credit insurance covers you against the risk of debtors becoming insolvent. But you'll need to bear part of the risk yourself.
  • Legal expenses insurance covers the costs - such as solicitors' fees and court costs - of defending a legal action.
  • Fidelity insurance protects against losses caused by dishonesty or theft by staff.
  • Money policies cover cash, cheques and stamps. Different levels of cover apply depending on whether money is on your premises, in safes or transit.
  • Travel insurance will be required if you or your employees travel abroad on business.

See insurance: business property and assets.

The Association of British Insurers (ABI) provides further information on business insurance.

Make sure you understand the terms used in your policy - the British Insurance Brokers' Association (BIBA) provides definitions of common insurance terms.