Business insurance in the UK

You are now well informed and almost ready to take off like a rocket with your business in the UK. But you can’t be too careful, so we’ve put together an article to tell you what you need to know about business insurance in the UK.

Launching and running a business in the UK is exciting, but also risky at the same time. From customer complaints to accidents at work, you need to be covered and that’s where business insurance comes in.

The need for business insurance

Although not all insurances are compulsory, having insurance with adequate coverage can save you from many problems and even the closure of your business. In addition, some contracts with customers or suppliers require you to have certain insurances in place before you start working.

Employer's Liability Insurance: the compulsory insurance

By the simple fact of employing someone, you are obliged to take out Employer’s Liability Insurance (EL). It covers possible injuries or illnesses suffered by your employees during the working day in your company.

You must take it out with a minimum of £5 million of cover, and always through an authorised insurer in the UK. Remember that if you don’t take it out, it can end up costing you a whopping £2,500 for every day that you don’t have cover. So, if you have workers, don’t gamble.

Not compulsory but recommended insurance

If your business often interacts with the public, customers or suppliers in person, the Public Liability Insurance is a great option.

This insurance covers you for claims for personal injury or property damage caused by your business to third parties. An example of this would be if you have a shop and one of your customers suffers damage in the shop (a slip). That is why it is one of the most common insurances among the self-employed, shops and the hotel and catering trade.

Another interesting option is the Professional Indemnity Insurance. This insurance covers claims for errors, negligence or loss of data of a client.

It is common in businesses that offer professional services, consultancy or advice. But it may be mandatory in sectors such as architecture, engineering or finance, as it is required to obtain licenses or join professional associations.

More insurances

If your business has a physical office or warehouse, then Commercial Property Insurance is a must. This insures the building and everything inside in case of fire, flood, structural damage and even theft. It is important if you have computer equipment or machinery.

One of the most interesting insurances is the Business Interruption Insurance. It is related to the previous case, and the fact is that you never know when your business will have to stop due to an unforeseen event. If a fire or natural disaster stops your business, this insurance covers the loss of potential revenue, the payment of rent and the costs of a possible temporary relocation.

And, of course, Cyber Insurance, which is essential nowadays, especially if your handle sensitive data or customer databases, use e-commerce platforms or provide digital services.

Covers damage from cyber attacks, data leaks and system recovery. It also covers legal costs for the consequences of these problems.

Price of business insurance in the UK

The price of business insurance in the UK will depend on factors such as the size of your business, the sector you operate in, the number of employees and the level of cover you need.

Prices will range from £50-100 per year for sole traders, while more comprehensive cover for larger companies such as SMEs can exceed £1,000 per year.

Compare insurance with the online tools available. You can also seek advice from a specialist broker if your business has special features. But above all, be patient and compare prices and coverages well because they can get you out of trouble.

In short

Having the right insurance is not only a legal obligation in some cases, it is a safety net that can save your business in times of trouble. From basic Employer’s Liability to advanced cover such as cyber security or business interruption. To have the right policy in place is more of an investment than an expense.