Understanding the different types of business insurance

Whether you’re running a start-up or are a well-established company, safeguarding your business should always be a priority.

Business insurance is a specialist form of insurance designed to protect your business against  unforeseen events or industry risks. The group of insurance policies can serve as a crucial safety net for your business, offering financial protection against a range of unexpected events that could otherwise disrupt or compromise your operations. From building damage and legal claims to employee injuries and professional mistakes, each business can face a range of unique risks, however, the right combination of business insurance types can help you manage these risks, ensuring your business remains resilient in a changing world.

Continue reading to discover what insurance a small business may need, including the different types of business insurance and which cover your business may require.

What business insurance do I need?

If you employ anyone in your business, you are legally required to have employers’ liability insurance, protecting businesses and employees in the event that an employee experiences an illness or injury as a result of their work.

Some professional bodies or clients may require you to secure certain insurance covers. For example, accountants who are members of The Institute of Chartered Accountants in England and Wales are required to hold professional indemnity insurance.

What are the different types of business insurance?

The type of business insurance you may need will depend on your profession and the type of business you run. Read below to learn more about the different types of business insurance and identify what cover you may need to protect your business against unforeseen events.

Professional indemnity insurance

Securing professional indemnity insurance can prove essential for professions which include providing services, advice, or designs to clients or customers. This insurance is designed to protect you if you were to make a mistake in your work that results in a financial loss for your client or customer. PI insurance can cover legal defence costs, and the costs of any damages awarded, safeguarding your business against potential financial repercussions.

Public liability insurance

Public liability insurance is a type of business insurance which offers cover for claims of injury or damage to third parties as a result of your business’s operations. Any business which interacts with the public can safeguard themselves with financial protection against legal costs and any compensation payments you may be liable for. For example, an accident could occur on your business premises or when you are providing your professional services.

Employers’ liability insurance

Employers' liability insurance is designed to cover you in the event an employee becomes ill or injured as a result of working for your business. This insurance is legally required for most businesses, making sure that employers are able to cover the costs of legal defence and any compensation claims that may arise.

Commercial buildings and contents insurance

Commercial buildings and contents insurance offers comprehensive protection for the physical structure of a business premise and the items contained within. Elements of the physical structure covered includes walls, roofs, floors, windows and doors, protecting against a variety of unexpected events, including fire, floods, vandalism, and additional forms of damage which could result in extensive repairs or a complete build.

The insurance also covers movable items within your insured business premises, such as furniture, equipment, stock, and personal belongings. If these items were to be stolen, damaged, or destroyed, the policy can cover repair or replacement costs.

Occupational personal accident insurance

Occupational personal accident insurance is a type of business insurance which provides financial protection to individuals and their businesses if an accident occurs whilst performing work-related activities. By securing this insurance, compensation is available for accidental injuries, permanent disabilities, or death, that a business owner may suffer whilst providing professional services.

Holding this policy means you are able to cover medical expenses, loss of income, or other related costs, to ensure you and your family are financially supported, including a one-time payment for serious injuries, weekly benefits for temporary disabilities, and reimbursement for medical treatments and rehabilitation costs.

Cyber insurance

Cyber insurance is designed to protect businesses from the financial and reputational damages that arise from cyber incidents, such as data breaches, hacking, and other cybercrimes. The financial assistance offered by this cover encompasses a variety of costs associated with cyber incidents, including legal fees associated with affected clients or third parties, and the costs of restoring data or systems. The expenses covered additionally include notification costs to inform affected individuals or clients about a cyber breach, and can extend to cover the loss of documents or data, and even the loss of money or goods due to cyber fraud.

Legal expenses insurance

Legal expenses insurance is a type of business insurance which is often seen as a crucial safeguard to cover any costs which may arise associated with legal action, and to reduce the potential financial burden. This can include, but is not limited to, fees for solicitors, barristers, and expert witnesses.

This type of insurance includes a range of additional services, such as legal advice helplines, to further benefit the policyholders.

Directors’ and officers’ insurance

Directors’ and officers’ insurance is a specialised insurance designed to protect individuals in managerial or executive positions. The cover aims to safeguard against personal losses which directors and officers could incur if legal action is taken against them whilst they are serving in their respective role, including legal defence costs, investigations, and extradition proceedings.

This insurance can also offer to assist with crisis management in the event of a public relations issue that could impact the directors’, officers’ or company’s reputation.

Please note: This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. Here at Ollo insurance, our advisors are on hand to assist you in discussing your insurance needs, or any of the information in this article.