Business insurance

The essential insurance cover for small businesses

With 99% of UK businesses being classified as ‘small’ and having less than 250 employees, it is important to have adequate insurance cover in place. Particularly if you operate in retail, food or hospitality, you need to think about how your business may affect others and if you could be liable for any damages.

Ultimately, the impact of a lawsuit can be hugely expensive and detrimental to your business – so having the right cover is vital.

Businesses that come into contact with members of the public tend to be at a higher risk of making a claim. Here we touch on the most important types of insurance to cover your small business effectively.


Public Liability

This refers to how carrying out your business activity may interfere with those around you including customers, passersby, local neighbours, the environment and even trespassers.

Whilst as businesses we always try our best to protect customers, we never know when an accident will occur. Having public liability in place means that your insurer can contribute towards any compensation, medical fees and legal costs associated with any wrongdoing.

The most common example is if someone slips on the wet floor of your shop and sprains their ankle. As a business owner, you have a legal obligation to protect anyone that engages with your business and therefore, they have the right to demand compensation.

Other examples where public liability insurance might be used include a handy man working on someone’s premises and breaking something valuable whilst doing their job. They will be required to replace any damaged items and this is something that they can claim for.

Cover is available for up to £10 million per year.


Professional Indemnity

Professional Indemnity cover is specifically for those giving professional advice. This includes lawyers, doctors, financial advisors, accountants, marketers and consultants.

The idea is that the advice received by the customer will have a big impact on their health or financial position. If the client feels that the professional has acted negligently or provided bad advice, they may wish to seek compensation and take legal action.

For instance, if an investor has lost a lot of money based on poor advice from a stockbroker, they may wish to demand compensation if they feel that proper research and due diligence has not been carried out.

Up to £10 million worth of cover is available per year.


Products Liability

You need to be covered for any products that you manufacture or administer to other businesses or the general public. There is always the risk that something that you create can be defective or below standard and this presents a danger to the customer.

A recent example involved the new Samsung phones that caught fire. This led to injuries to some of the users and further damages – hence they were able to take legal action and receive compensation.

Products liability ranges from £1 to £5m for small businesses, and can be extended depending on the size of the company. It is common for anything that is made or manufactured, including foodstuffs, electronics and beauty treatments.


Employer’s Liability

As an employer, you have a legal obligation to protect any members of staff that you employ from any potential injuries or dangers associated with their work. This can include simple things like falling off a ladder at work or more dangerous things like heavy lifting and handling toxic chemicals.

In the event that an employee has suffered injury or damages, they can claim from their employer for sick pay, medical compensation and damages.

Up to £10 million worth of cover is available and it is such a requirement for firms to have a policy in place that they can be issued a daily fine of £2,500 for not showing documentation upon request.  



Contents are the physical items and machinery you require to carry out your business. This includes computers, any stock or inventory and machines. If any of your contents are stolen, vandalized or broken due to fire, flood or other peril, you can claim from your insurer to have these replaced immediately and limit your business interruption.

The amount of cover available runs in the millions of pounds depending on the value of your contents. It is important to name and have a record of specific items on your policy so that you can claim for them effectively.