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6 Types of Business Insurance you Should Know About

If you’re a small business, then you’ll know that it can be quite hard to keep up with which insurance are the types that you have to have, the ones that you probably should have and the ones that your business doesn’t need at all.

Find out about the various types of insurance, form employers’ liability to business interruption insurance.

The Main Types of Business Insurance

There are many types of business insurance available for your business’ protection.  Here are the six most important ones:

1. Employers’ Liability Insurance

This is the only type of insurance that is a legal requirement. If your business employs even just one person, then you’ll need at least £5 million of cover, and you could be fined up to £2,500 a day for every day that you don’t have insurance. However, the legislation has a few loopholes in that you don’t need insurance if you employ immediate family members.

Employers’ liability insurance covers you against any compensation claims made by your employees for injury or damage caused by the work.

2. Professional Indemnity Insurance

This is not a legal requirement, but it should be a very serious consideration for your business. It protects you against claims made by a client or customer because they think you’ve made a mistake that has cost them money. For example, it could be breaching confidentiality, infringing copyright or giving bad advice.

If you’re offering a professional service or you’re a graphic designer, for example, then it could be essential for you to have this type of insurance. Areas like law, financial advice, healthcare and architecture have regulatory bodies that insist upon professional indemnity insurance before you can join.

3. Public Liability Insurance

If your business comes into contact with the public, whether that’s through visitors coming to your shop, or you’re going into people’s homes, then this insurance is designed for you. It is designed to protect against claims made by someone who blames injury or damage on your business.

Business insurance protection

photo credit: Silvia Sala / Flickr

4. Product Liability Insurance

Is similar to public liability insurance, but it covers claims made by customers who believe that a product that you’ve sold to them has damaged or injured them. Remember the McDonald’s Coffee being too hot case?

5. Building and Contents Insurance

If you’ve got premises like a shop or an office, then buildings and contents insurance is a good idea as it will cover you for things like fire or theft.

6. Business Interruption Insurance

Covering you for fires, floods and burglaries, business interruption insurance will pay out the capital that you lost out on because of the disaster. It could be potentially business-saving if you get good cover.


All these types of business insurance are important, but when you’re a start-up it’s easy to forget about the obvious things too. For instance, if you’re a delivery business or your tradesman use vans, you’ll need to make sure that your cars or vans are covered in a trade or business capacity and not just regular insurance.

About author

Ivan Widjaya
Ivan Widjaya 2537 posts

Ivan Widjaya is the Owner/Editor of, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

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