When setting up your small business, you probably know already that you need some kind of business insurance. But do you know which types of insurance are applicable to your business? Even if you’re a sole trader working from home, you will still need some form of insurance protection, so here’s a quick lowdown of the types of insurance available.
Employee liability insurance is necessary only if you have employees. Therefore, if you’re the one-man band as in the example above, this is one kind of insurance you won’t need. This insurance will protect your employees in the event of an injury at work. It will not, however, protect the public. Public liability insurance is required not only if you have customers visit your premises, but also to protect you and them against any action by your business which damages them or their property. Consequently, if you are a tradesman or professional who visits customers in their home, you will also need public liability insurance.
Indemnity insurance is applicable to those who offer professional services. This protects you if you make a mistake which then results in your client losing money. It will provide legal cover and financial compensation, and will also cover you if a client decides to sue you for breach of contract.
As well as these types of policy which cover your business’s practices, you will also need cover to protect your premises and assets. Insure your business premises for contents (and building if you own the premises), and if you work from home, make sure that your house insurance will cover any equipment or business files at the property.