The Eight Essential Types of Insurance You Should Consider for Your Business: Limited Company or Self Employed.


Worried about what might happen in the future? Business insurance acts as a safety net for any company.


Every industry can have a wide range of liabilities. A digital marketing agency may not need the same types of insurance as a shoe manufacturer or a dental practice. However, there are a few essential types of insurance that all businesses will need, as mandated by law or otherwise.


1) Public Liability 

Public liability insurance is not a legal requirement, but If you come into contact with members of the public, public liability insurance is often considered essential among business owners, and in some professions, you may find it impossible to trade without it.

A public liability insurance policy covers you both on-site and off-site. Your business can be compensated if you are found at fault, as well as cover your legal costs defending claims.


2) Professional Indemnity 

Professional indemnity insurance isn't also a legal requirement, but if you're found to have provided poor services, bad advice, or dubious design, which has resulted in you or others losing money, professional indemnity insurance will cover you of having to pay for legal fees, expenses, compensation costs, or other costs associated with defending against claims.

For many sole practitioners, contractors, and consultants, professional indemnity insurance is a prerequisite for securing a contract or joining a professional body. It’s a good idea to ensure this is a requirement before you arrange cover.


3) Employers’ Liability 

Employers' liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It's legally required of all businesses with one or more employees.

In the UK, if you have employees (including many types of subcontractors), there is a legal requirement that you carry employer's liability insurance. Business owners who fail to obtain insurance for their employees can be fined up to ÂŁ2,500 per employee per day.


It is important to note that there are a couple of exceptions to the law: If you are running a family business without incorporation, you're not legally required to buy employers' liability insurance. Likewise, If you’re a  sole trader and work by yourself or only employ close family members, you are not required to have it, unless a contract requires it.


4) Directors and Officers' Liability 

If your company has directors or key managers, directors’ and officers’ liability insurance can cover the cost of compensation claims made against them by investors, shareholders, regulators, employees, or third parties.

According to the Institute of Directors, all directors should have the appropriate insurance in place in order to protect themselves against the personal risks that they may face in their role as a director or officer of a company.


5) Product Liability

Service-based businesses may not need this as much. However, companies that sell products can’t afford to do without product liability insurance. 

This can help protect the business from damages caused by the use of its products. It’s a flexible type of insurance that can cover a specific product or a range or category of products. 


6) Property and Equipment

A property insurance policy can protect against a wide range of physical damage. It’s something that businesses need whether they lease or own the property.

Through property insurance, a company can also protect its physical assets like inventory and equipment.

If you run your business from home or from an office, your electronic devices, including laptops, mobile phones, tablets, and other equipment, are susceptible to theft, loss, or irreparable damage.

Furthermore, it can protect a business from environmental damage such as floods, fires, and malicious offenses.


7) Business Interruption 

One of the most overlooked and undervalued insurance policies. It can cover a range of environmental or even catastrophic events that lead to a halt in operations. 

Simply put, a business interruption insurance policy can help keep a business afloat when disaster strikes.

Having this insurance could compensate for lost income when you need it most. However, most companies covered by this insurance are those that have a physical location, like retail stores, for example.


8) Data Breach

Data breach insurance policies are rather new. But they can be invaluable for businesses that work with vast amounts of sensitive information.

Storing any non-public client and employee data makes a business liable for its security. The insurance could provide protection in the event of a hack or if a physical data breach occurs.


Consider Bundle Insurance Packages

Insurance costs can add up, especially when a business needs coverage across multiple areas.

Therefore, some business owners choose bundle packages to save money.

For example, a business owner’s policy or BOP offers a lot of what a company might need:

  • Vehicle insurance
  • Property insurance
  • Crime insurance
  • Business interruption insurance


Such a package may not cover everything, but it covers most and it’s cheaper than getting each policy individually.


From My Business to Your Business

Every business has Some Risk!  No company has zero operating risk. For small companies, one lawsuit can be enough to call it a day. 

In this regard, having the right insurance types can be vital in ensuring your success.


You're very welcome to get in touch with Grace Certified Accountants if you have any questions.  Book a Free Call directly into my diary HERE.


Speak Soon!


Dora Ngoma


Director & Managing Partner

Grace Certified Accountants


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