What types of commercial insurance are there?
Every business is different, which means that your commercial insurance policy should reflect the individual needs of your organisation. Commercial insurance policies can usually cover some, or all, of the following:
Employers’ liability insurance
If your business has employees (even if it’s just the one), then it’s a legal requirement to have at least £5 million employers’ liability insurance in place. Most commercial insurance policies will include this as standard, although you may need to top up this cover dependent on the nature of your business and the number of employees you have.
Employers’ liability insurance will protect your business against compensation claims made by employees following injury, illness or damage to their property in the workplace.
Public and products liability insurance
Public liability insurance provides cover for compensation claims made against your business the event that a customer suffers injury, or damage to their property, as a result of your business operations.
Products liability insurance covers for the same as public liability, but where illness or injury is caused by products produced, sold or supplied by your business.
Professional indemnity insurance
Professional indemnity insurance provides the policyholder with protection against liability for any claim first made against them for professional neglect, error or omission. Essentially, this type of insurance will protect you against the consequences of giving bad advice, and is an important cover for any business or individual that offers advice or services (such as accountancy services) to their clients or customers.
Directors’ and officers’ insurance
Also known as ‘management liability insurance’, directors’ and officers’ liability insurance protects your directors or officers against legal costs that may arise as a result of their alleged wrongful acts in their capacity as a director of the business. For example, if you were sued by one of the other directors for accidentally sharing confidential information, this type of cover will ensure that you aren’t left out of pocket following a law suit.
Business interruption insurance
Business interruption insurance provides cover for losses that occur following an incident that interrupts (or interferes) with the activities of your organisation. This could include cover for lost revenue or additional expenses incurred should you have to close your business due to an insured event.
Cyber insurance will provide cover for loss of income and compensation claims made against you following a cyber attack or data breach. Whilst hackers are the cause of most serious cyber breaches, cyber insurance will also cover you against large data loss or breaches caused by system or employee error.
Commercial property insurance
If you own the property your business resides in, commercial property insurance will cover material damage to your buildings and contents. This policy would also be suitable if you’re a commercial landlord letting out a property for business purposes.
If you’re renting or lease the property, it will usually be the landlord or management company’s responsibility to insure the buildings. However, you may still require commercial contents insurance for any machinery, computer and telephony equipment or furniture that you own.