Duedil Blog

Deciding to start your own business is certainly both an exciting and daunting proposition. Besides the usual concerns of creating a unique product or service, hiring staff, and monetising your ideas, you need to think about protecting your business with insurance. There are basic insurance products that any business will require, and depending on the nature of your business, there are a multitude of different insurance products that may be required or at least recommended.

Despite the myriad of options out there, insurance providers will often bundle them together for certain types of businesses. For example, a product called “shopkeeper’s insurance” may include fidelity, property, stock, and business interruption insurance. Below is a basic breakdown of some of the more common types of insurance. It is not intended to be definitive, but merely a guide to getting started. A great way to check what kinds of insurance your business may require is to take the online test at bis.gov.uk.

Public Liability

Public liability insurance is designed to protect your business against damages arising from unintentional harm, or tort, usually as a result of negligence. While public liability insurance isn’t mandatory, it’s a good idea for any business with employees, as this covers damages to members of the public caused by the company or any of its employees. This can include damages to both people and their property, and covers legal fees, expenses, costs, and hospital treatment, which the NHS charges. The premium, or upfront fee for securing the insurance policy, will depend on a number of criteria, e.g. the age of the business, its health and safety record, the amount of contact with the public, etc.

Employers’ Liability

Employers’ Liability (EL) Compulsory Insurance is designed to assist with compensation for employees who get injured while working. As the name suggests, Employers’ Liability insurance is mandatory if you have any employees. In cases where the employer’s negligence is to blame for an injury, even if the company goes into liquidation, an employee can still claim compensation. The minimum coverage for EL is £5 million, and many policies cover up to £10 million for such payments. Due to the compulsory nature of EL insurance, the Health and Safety Executive (HSE) can fine a company that has failed to cover itself up to £2,500 per day. For more information, check out the HSE’s guide.

Fidelity Guarantees

Depending on the nature of your business, fidelity guarantees can be necessary for protecting your business from theft or other losses due to employee dishonesty. Shop owners, for instance, will often take out fidelity insurance because of the availability of opportunities for employees to steal stock. On the other hand, a company whose focus is predominantly service orientated, or doesn’t have any non-stakeholding staff, is less likely to see fit to purchase fidelity guarantees.

Legal Expenses

In the event of legal action being taken against your company that is outside of the domain of employers’ liability insurance, you can take out legal expenses insurance. For example, if an employee brought charges against your company, and the case went to an employment tribunal, legal expenses insurance would cover legal costs including fees for accountants and other expert witnesses, barristers, and solicitors. Additionally, legal expenses insurance also covers opponents’ legal costs in the event that you lose the case in a civil court.

Comparing the markets

Finally, when looking for insurance, it’s always a good idea to get quotes from a number of providers to make sure you’re getting the most appropriate coverage at the best available prices. If you’ve watched any commercial television, you must be aware of the myriad websites that compare various insurance programmes and prices. Many price comparison sites are owned by insurance companies themselves, so make sure to shop around while you’re shopping around. I’ve linked to a few of these sites here, but again, this list is certainly not extensive.

Compare the Market (owned by BISL Ltd)
Go Compare (owned by gocompare.com Ltd)
Money Supermarket (owned by moneysupermarket.com Plc)
Morethan Business (owned by the RSA Group)
Construct a Quote (owned by Moorhouse Group Ltd)
SME Insurance (owned by SME Insurance Services)
Make it Cheaper (owned by Make It Cheaper Ltd)

Jaspar

Jaspar is a copywriter and one of the newest members of the Duedil team. He studied Economics and is interested in finding new ways for people to use Duedil - from entrepreneurs and investors to academics and journalists. Duedil is the world’s largest free database of company information. Using data gathered from a variety of sources, including Companies House, Duedil presents business owners, startups, venture capitalists, and the otherwise curious with key insight into any company in the UK and Ireland.