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Business insurance for beginners

When you’re starting a business, it can be hard to know what insurance you need.

To help, Simply Business have put together a quick and easy guide of the main types of business insurance that are available. This blog will help you get to grips with the options and make sure your business is covered if anything goes wrong.

Public Liability Insurance

What it is: Public liability insurance covers legal costs and compensation payments claimed by a third party for an injury they suffer or for damage to their property. This is important if your business interacts with clients or other members of the public.

Examples: It could cover compensation claims if you spill coffee on a client’s computer, or if a customer slips on your wet shop floor.

Important information: In the UK it’s not a legal requirement to have public liability insurance. However some contracts – especially for work in the public sector – will demand a minimum level of public liability cover.

Professional Indemnity Insurance

What it is: This protects you if a client sues you for a mistake that causes them to lose money. It’s therefore important for businesses that offer advice, provide a professional service, or handle client data.

Examples: A good professional indemnity policy covers legal costs and compensation payments, up to the limit of the policy. If you copied the wrong person into an email discussing sensitive client matters, your client could sue you for breaching confidentiality. Or if your architecture company drew up faulty plans and a building later collapsed as a result, your client could seek compensation.

Important information: Depending on what type of business you are, your regulator or professional body may require you to have this cover. This is the case for solicitors, accountants, financial advisers, architects, and some healthcare professionals.

Employers’ Liability Insurance

What it is: If you have one or more employees, you’re legally required to have an employers’ liability policy. This insurance covers you for any claims made by your staff for injury or illness that they think has been caused by their work or workplace.

Examples: It could cover you for claims if an employee tripped on loose office carpet and broke their leg, for example, or for construction site injuries.

Important information: By law, anyone with staff has to have at least £5 million of cover, or face a fine of up to £2,500 each day. However, there are some exceptions to the law, for example if you only employ close family members you’re not legally obliged to have cover.

Other Covers

Of course, every business has slightly different insurance needs, and it’s important that you get a policy that’s tailored to you. There are plenty of other business insurance covers that you could consider adding to your policy, including product liability insurance, stock cover, office equipment insurance, and turnover protection.

Simply Business is the UK’s biggest provider of business insurance with over 300,000 customers, including lots of start-ups and small businesses. They compare quotes from a panel of leading insurers, and help you create an insurance package that’s tailored to your business.

As a Start Up Loan recipient, you can redeem an exclusive business offer of 10% cash back on your business insurance when using Simply Business.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free  Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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