What insurance is compulsory for businesses?
Employers’ liability insurance
Employers’ liability insurance is the only type of insurance that is legally required for most businesses. It protects you against legal and compensation costs if a current or former employee makes a claim after being injured or becoming ill due to their work for your business. The main exceptions to this requirement are if you only employ family members or operate a publicly funded organisation.
Business car insurance
If you mainly use your vehicle for work-related activities, you’re required to have business car insurance. This includes situations where you drive between different work sites, visit clients, transport stock, drive colleagues, or allow colleagues to drive your vehicle. In these cases, a standard car insurance policy won’t provide sufficient cover - you must have a business car policy.
What insurance is highly recommended for businesses?
Public liability
Public liability insurance protects your business against claims from members of the public who are injured or have their property damaged either on your premises or as a result of your work. While it's not legally required, many potential clients may insist you have this cover before agreeing to work with you.
Product liability
Product liability is strongly recommended if your business designs, manufactures, or supplies products. This type of cover protects you against claims if a product you provide causes injury or damage to someone’s person or property.
Professional indemnity
If you provide professional services or advice, it’s highly advisable to obtain professional indemnity insurance. This insurance protects you if a client suffers financial loss due to your work. Additionally, many clients may require proof of professional indemnity insurance before working with you.
Cyber insurance
Cyber insurance covers the financial and reputational costs if data or electronic systems have been lost, damaged, stolen or corrupted. This includes the cost of investigating a cybercrime, recovering lost data, repairing computer systems or acting on your behalf if you’re asked to pay a ransom.
Management liability insurance (D&O)
Management liability insurance, also known as directors’ and officers’ liability insurance, protects senior managers against fines, legal costs, or compensation claims made against them. These claims can stem from various issues, such as mistakes in company finances or health and safety concerns affecting employees.
What insurance is highly recommended to protect your assets?
Buildings, contents and stock insurance
Buildings insurance covers damage to your premises, while contents and stock insurance protect the items inside.
Equipment and machinery insurance
Equipment cover (such as computer equipment or machinery) ensures vital tools and machinery can be repaired or replaced if damaged or stolen.
Business interruption
This type of insurance supports you financially if you’re unable to trade due to events like fire or flood, helping to cover lost income and keep your business running.
Why it’s important to review your coverage with a broker
Regularly reviewing your insurance with a broker ensures your cover keeps pace with your business. Here at NFP, our insurance specialists can help you to identify gaps, recommend updates, and tailor policies to your evolving risks, helping you stay protected without paying for unnecessary cover.
Likewise, by providing us with up-to-date information such as asset values, employee numbers, or changes to property in turn helps us to ensure your protection remains accurate and comprehensive as possible.