What Are The Best Business Insurance Companies In The UK?
In 2018/2019, it has been reported 89,461 employer liability cases in the UK, registered to the Compensation Recovery Unit (CRU).
Have you ever thought that your company may be part of this number next year?
To avoid the costs of such liability cases, it is very important to purchase the right business insurance package, which will act as a protection against any unexpected event that could jeopardize your business.
Table of Contents
What is business insurance?
Business insurance offers protection for enterprises and businesses whose activities can be subject to several types of risks. Some business insurance are legally required to run a professional activity, others are not compulsory but can be highly recommended depending on a the type of business concerned.
Why do you need business insurance?
In some extent, you will need business liability insurance because it is a legal requirement to run a company. Not respecting this obligation could expose you to pay very high penalties - that can go up to a daily £2,500 fine.
Besides, depending on your kind of activity, some clients may expect from you that you offer enough insurance guarantees to treat with you - and require that you prove having a proper professional indemnity insurance.
Furthermore, having a good business insurance cover is very necessary in order to be protected against any hazard that can always happen in the existence of a business, which is made of risk and uncertainty. In this sense, business insurance is one business company's shield when the situation turns bad and the business' health is in jeopardy.
There exists many different business insurance covers, depending on the type of liability insurance, the type of business you run and whether your are a small or a big company. Here is a list of the main risks a business can face and the costs they can represent if occurring:
| Type of risk | Cost for a business |
|---|---|
| Damage against material properties (stock, equipment, furniture) | From £100 to millions - including the business material properties loss, and the financial risk induced |
| Injury suffered by one of your employees | Can reach £ dozens of thousands - in medical treatments, legal compensations, invalidity pensions, and possible legal costs in case the company is sued |
| Damage to the company's building(s) | From £100 to millions - depending on the real estate assets of your company |
| Business interruption | From £ thousands to dozens of thousands - particularly critical for self-employed people and small or medium businesses |
| Losses of third-parties due to the company's responsibility | From £ thousands to millions - the bigger the contract with the client, the higher the loss that he'll be able to claim on you |
| Injuries or damages caused by your work to third-parties | Can reach £ dozens of thousands - in medical treatments, legal compensations, invalidity pensions, and possible legal costs in case the company is sued |
| Legal costs when your business is sued | Can reach £ dozens of thousands - if you lose your trial, paying your legal advisors and your lawyer |
A business insurance package is therefore meant to prevent your business from suffering any financial or material risk in case any incident or damage occurs to your employees or goods.
Good to know
Beware, in a vast majority of business insurance plans, the Covid-19 pandemic will NOT be considered as a valid circumstance to claim for business interruption.
What are the different types of business insurance?
Those 3 types of business liability insurance cover different aspects of an enterprise's activity:
In addition, and depending on the type of business you run, other complementary business insurance can be suited to your activity:
| Business insurance product | Situation or goods covered |
|---|---|
| Product liability insurance | Product liability insurance covers you in situation when you are held liable of a customer that results injured due to a faulty product of yours. |
| Stock insurance | If you trade goods or stock products in your premises or in storage, you might want to insure the cost of their replacement in case they result stolen, damaged or destroyed. |
| Business buildings insurance | Every business owner has to deal with a building (it can be standard premises, a shop, a workshop, etc.), even when working from home. Buildings insurance helps you cover any risks linked to your premises. |
| Business legal protection insurance | Also know as business legal expenses insurance, this insurance covers your expanses in a situation where you are sued by any other party. That cover costs for your defense, or indemnisation due to your prosecutor. |
| Personal accident insurance | This kind of policy includes expanses that are to be made when occurs to you a serious damage or illness. Medical care costs, and compensation for lost incomes can be part of it, under the limit set by your plan (always check this limit before purchasing your plan). |
| Business interruption insurance | Business interruption insurance provides you with financial help when your activity is stopped under exceptional circumstances (for example when your premises or stocks are victim of floods or a fire). That gives your company a most-needed boost in that particular moment. |
| Business contents insurance | This kind of insurance plans aims at protecting your company's material contents - such as tools and other equipment related to your activity, in case they are stolen, destroyed or damaged. |
Is business insurance mandatory?
Every business ran in the UK is required to have a minimum level of business liability insurance cover. Beyond the three main business insurance types that we've described above, it is recommended for every business to have a comprehensive business policy package which includes those three ranges of cover. In addition, a standard property cover and a commerce vehicle cover (when a vehicle is used under professional purposes) should complete this package.
Is the employers' liability insurance mandatory?
The only compulsory business liability insurance in the United Kingdom is the employers' liability insurance, which protects your staff member(s) of anything causing harm to them.
You have the legal obligation to purchase such an insurance as soon as you contract a staff member.
Is the professional indemnity insurance mandatory?
The professional indemnity insurance is not a legal requirement to run a business in the UK. However, in some particular professions or projects, it is likely that the client will require a proof of a valid professional indemnity insurance to agree on a contract. For example, that is the case for many business advice consultancy deliveries or other services deliveries.
Is the public liability insurance mandatory?
No, the public liability insurance is not mandatory in the UK for businesses. However, for companies running activities in close contact with the public, or which activity can result in damages to third-parties, it is highly recommended to book such a policy, that will provide a protection in case something unexpected occurs.
| Type of business insurance | Mandatory |
|---|---|
| Employers' liability insurance | Yes, as soon as you hire staff |
| Professional indemnity insurance | Can be demanded by some clients in some cases |
| Public liability insurance | No, but highly recommended |
What level of business insurance do I need?
The level of business insurance you need depends on different criteria. Depending on if you run a small or a big company and on the kind of activity you are involved in, the adapted level of business insurance cover will vary a lot. However, as concerns the 3 main types of business liability insurance, there exists standard levels of cover in the UK.
The main business insurance cover levels
| Type of liability | Basic level of cover | Comprehensive level of cover |
|---|---|---|
| Public liability insurance | £1 million | £10 million |
| Professional indemnity insurance | £50,000 | £2 million |
| Employers' liability insurance | £5 million (legally required) | £10 million onwards |
Other business insurance cover levels
When seeking the good level of cover for insuring your business' building(s) and / or material properties - such as equipment, tools or stock - you will need to assess the amount that could be lost in case anything occurs. Depending on the value of your business' assets, the cover levels can range from amounts as small as £500 if you are self employed working home with your computer, to several millions if you own an entire building or possess stocks of very precious goods in stock.
In this later case, you may require the advice of a business insurance broker to assess precisely your needs in term of liability cover. It is recommended not to minor the damages your company could suffer in case any event occurs. A comprehensive business insurance cover is always the best way to keep safe and avoid financial difficulties to happen due to unexpected circumstances.
How do I get a business insurance?
Getting the right business insurance package suiting your needs is an important process in the course of one company's development. That is why it is important to be careful, and to make your choice following several steps as described here.
1. Inform yourself about business insurance
Business insurance is no simple topic. Before making any initiative towards purchasing a policy, you should first take the time to make sure you clearly understand what is at stake here. Carefully read this page content, and once you feel you've got it right, you can pass on to the next step.
2. Evaluate your business insurance needs
Every business situation is unique. Depending on your professional activity, on if your are employing staff or not, if you own your business facilities and premises or not, your needs will not be the same, nor the levels of cover required. In case you need help, the services of a specialist may be useful.
3. Always compare different business insurance quotes
In order to pick up the right business insurance quotes at the best price, you should always use a business insurance comparator. That is what we offer through our business insurance providers review, along with guides and other useful contents to guide you as best as possible.
Top 10 tips to know before taking out a business insurance
Here is a list of tips you should consider before booking your business insurance:
1. Always compare through an online platform, such as HelloSafe
2. Make a checklist of every items and aspects of your business you need to cover, material and immaterial
3. Book a liability insurance. That may avoid you unexpected legal worries and costs, for events on which you no control at all
4. If you are to provide advice in the course of your business, make sure you protect yourself through a professional liability cover
5. When working from home, avoid considering that your home insurance plan will apply as a business insurance plan. Separate them.
6. Make sure you purchase the right coverage for your staff members. That should always include liability for their work.
7. If you know your business can be affected under certain circumstances, book a business interruption plan. That will bring you a financial help when most needed.
8. Make sure you book the appropriate cover for your premises when necessary. This particularly the case when running a shop, a store, a restaurant, a pub, etc.
9. Prefer business insurance packages rather than booking separate policies for different liabilities. That will be more cost-effective.
10. Never purchase a business liability insurance because it is cheap. This is a strategy that could reveal very harmful is the long run.
How much is business insurance?
There is no actual average cost for a business insurance package in the UK. Indeed, the price depends on a range of criteria that one has to take into account when comparing quotes. Indicative quotes depending on your type of trade:
| Situation | What you need to insure | Cost of business insurance |
|---|---|---|
| Freelance | Your business items and contents (computer, phone, etc.) | From £5 per month for the most basic package including public liability and professional indemnity |
| Sole traders | As an exclusive owner of a business, you need to be insure for your public and employer's liability (if you have staff) | From £10 to much more, depending on if you are alone, working from home, your kind of activity |
| Retailers, shops and stores | Your premises, your stock (if any), your public liability in case something occurs, your employer's liability (if you have staff) | Fair packages covering all the aspects of your business range from £50 for the most basic to much more |
| Consultants | The advice you deliver to your client, through a professional indemnity insurance, which is key for this kind of business | Fair packages including professional indemnity and public liability range from £60 for the most basic ones to much more |
| Dog walkers | Your public liability (if any event occurs related to the pets you walk), your professional responsibility | From £10 to £100, for packages including professional indemnity and public liability |
What can affect the price of my business insurance policy?
As any insurance policy, the cost of your business liability insurance depends of an array of parameters that can be:
- the size of your business;
- your professional activity;
- your business location;
- the type and level of cover you are seeking;
- your business insurance history record;
- some eventual extra options you'll want to add to your basic cover
How much is small business insurance?
Small business insurance packages range from £5 per month for basic covers to much more for comprehensive policies.
Which business insurance for which trade?
Depending on the trades, business insurance packages can vary a lot. You can specific business insurance policies depending on if you need:
- Cleaners' business insurance
- Hairdressing business insurance
- Catering business insurance
- Photographers' business insurance
- Shop business insurance
- Dog walking business insurance
- Tradesman business insurance
- Charity business insurance
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FAQ
Registering your business and purchasing your business insurance policy are two separate procedures. Indeed, when applying for your business insurance, you probably won't be asked about your registration number or any other particular element. You can therefore perfectly get your business insurance before registering your business.
Running an online business does not mean there is nothing - but your computer - to insure. On the contrary, you may wish to protect your data and intellectual property, which can be under the risk of a cyber-attack. There are business insurance covers tailored to suit the online businesses needs, that are worth being compared.
Yes, business insurance is necessary for self-employed workers. You will just have to find the best business insurance cover that will suite your self-employed status needs, that are different from a company hiring staff. In any case, it is important that your personal belongings and properties are insured in your professional context.
As business car insurance is different form standard car insurance, you will have to inform your insurer if you wan't to make use of your vehicle for business needs. Depending on your provider, you will be charged an extra premium per month, to insure your vehicle when going for business. This extra amount from almost nothing to more than £70 in some cases.