00
Days
00
Hours
00
Minutes
00
Seconds
Register for "Outpace Competitors in 2025: An Expert Guide to Gaining the Edge"
Register Now!

Types of Business Insurance for Small Businesses

Find out what types of business insurances small businesses should have, and which are required by law.

Protecting your company from risk is an important part of starting your own business. There is a number of different types of business insurance for small businesses you should consider. This short guide looks at five different types of insurance for small business.

Public Liability Insurance

Many people have liability insurance for personal protection in their home insurance - that means that, if another person was to get injured or become ill on their property, the liability insurance would protect its owner from being personally liable. Public business liability insurance functions in a similar way - it protects business owners from being liable for bodily injury or property damage during another person's visit to your company or store. If your business is responsible for another person's injury, however, not an employee's, liability insurance would cover medical bills and lost wages on their part.

Employee Liability Insurance

This insurance cover is only relevant to you if your business has employees or if you have forecasted that you will have employees in the future. This type of insurance provides cover if your staff members become ill or injured whilst at work. If you do not have employee liability insurance and a staff member gets hurt and they are unable to work, you could be responsible for covering their financial needs. Employee liability coverage can help with medical costs, lost wages, and disability benefits.

Product Liability Cover

Product liability insurance covers legal fees and compensation in the case of a customer being injured or their property damaged by a product you have sold. If you are the manufacturer of the products sold by your company, you are very likely to be liable for any compensation or legal fees. However, in some cases, you may even be liable if you have not produced the products, but they 'bear your company's name'. This can also be the case if you have, for example, repaired a product you have not initially produced. In the United Kingdom, under the Consumer Protection Act, manufacturers, distributors, suppliers, and retailers could be liable for any damage, injury, or death caused by a product or any of that product’s components.

Business Interruption Insurance

This type of insurance can help small business owners by covering any lost income in the cash of your business having to shut down due to specific reasons covered by the policy. This could, for example, include fire damage, theft, or falling objects. In such an event, business interruption insurance would pay for any monies lost due to damaged merchandise, lost earnings, as well as any expenditure caused by the damage (eg moving business premises).

According to Google Trends data, searches for business interruption insurance increased almost 2000% in March 2020. While any business interruption cover taken out now would be unlikely to cover interruption by the current pandemic, Covid and Lockdown were not factored into many business forecasts so you don’t want to be caught out again.

Commercial Building Insurance

Like building insurance on your home, a commercial building needs insurance - whether it is open to the public or not. Building insurance will cover any repair or rebuild costs of the building in question. It provides your business premises with protection in the case of floods, riots, storms, subsidence, burst pipes, fire, or theft. You could also consider taking out buildings content insurance, which covers properties inside the building (eg equipment or stock).

Small Business Insurance  FAQs

  • Which types of business insurance are required by law?

Under UK law, you are only obliged to get an employer's liability cover. However, some professional bodies may require you to get other types of business insurance. This will depend on the sector you are operating in - accountants, for example, are required to obtain professional indemnity insurance.

  • How do I know if I need small business insurance?

In the UK, it is required by law to obtain employer's liability insurance, if you are a business with employees. However, certain professional bodies will require other types of insurances for your company to operate. In general, it is advisable to look at different types of insurance to protect your business.


Start Your Free Trial

Let informed predictions and powerful reporting guide your business. Be ahead of the curve with Futrli.

Get business advice here

Our blog holds tips, how to’s and general business advice.

Business

Chancellor Rachel Reeves's first Budget raises taxes on business but softens the blow with targeted support

At Futrli by Sage, we’re here to help you make sense of all things Autumn Budget

This is some text inside of a div block.

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat.

Business

Chancellor Rachel Reeves's first Budget raises taxes on business but softens the blow with targeted support

At Futrli by Sage, we’re here to help you make sense of all things Autumn Budget

Business

Preparing for Big Shifts in 2025: How Futrli Can Help You Handle Rising Wages, National Insurance & Tax Costs

The Autumn Budget has introduced key changes for small businesses, here’s how Futrli can help you manage these budget changes effectively.

Accountants

How Deborah Whitaker from Not Just Numbers Uses Forecasting to Transform Small Businesses

In a recent webinar, Deborah (Debbie) Whitaker, Founder and Director of Not Just Numbers, shared her approach to delivering effective forecasting services.

Futrli News

Futrli's February 2024 Release

Accountants

3 Apps to beat accounting blues and scale your firm

Chris Downing catches up with three accounting app innovators to discuss the apps that they have developed that directly help accountants.

Accountants

Where most prediction software falls short

Tread carefully when looking for prediction software. Find out how to dig deeper into your predictions with the tools that count.

Small Businesses

Cash is King! 4 ways to keep your cash flow healthy.

Cash flow is essential to your business’ survival. Read our top 4 tips for taking control of your cash flow.

Small Businesses

10 Common Cash Flow Forecast Hurdles

If there’s one thing that all small and medium-sized enterprises should prioritise, it’s their cash flow. Read on to find out the top 10 most common issues.

Accountants

Empowering Accountants: How to Embrace Uncertainty with Futrli

The future is far from certain. Find out how Futrli helps accountants wade their way through murky, grey, “This might happen”-type scenarios.

Small Businesses

Inflation affecting your hospitality business? Take back control with these three steps.

Acting quickly is key to ensure you can ride out the incoming storm. Find out more in this article.

Small Businesses

Why cash flow forecasting helps businesses survive downturns in trade

Learn how cash flow forecasting is crucial for surviving slower trading periods.

Accountants

The 7 reasons why SMEs struggle with cash flow management

Find out the 7 major reasons why your clients’ businesses struggle to achieve a positive, healthy, consistent cash flow.