Why do I need business insurance?

Running a business means dealing with uncertainty. No matter how careful you are, accidents, mistakes, or unexpected events can still happen. Business insurance doesn’t prevent these things — but it does help you manage the fallout.

Without insurance, you’d have to handle those costs yourself, which could put a real dent in your finances. With the right cover in place, you get peace of mind knowing that if the unexpected happens, you’re not facing it alone.

Having business insurance can also give your clients and partners confidence in working with you, showing that you take your responsibilities seriously.

You can choose the type of cover you want based on your specific business risks. Some of the most common risks businesses face include:

• Injury to employees of a member of the public
• Damage to someone else’s property
• Loss or damage to your own equipment, tools or documents
• Theft of cash, tools or important files
• Disruptions caused by fire, flood, burglary or tech failure

If you employ people — whether they’re full-time, part-time, temporary, permanent or apprentices — you’re usually legally required to have employers’ liability insurance, and have an employers' liability insurance certificate to prove it.

Not having employers’ liability insurance can result in a fine of up to £2,500 per day for each uninsured day.

Beyond that, most types of business insurance aren’t a legal requirement in the UK. But they can still be a condition of working with certain clients, joining professional bodies, being part of a trade association or meeting regulatory standards.

Choosing the right insurance for your business might feel overwhelming at first. There are many different types of insurance available for companies of every size — from freelancers to multi-site operations.

Depending on the work you do and the risks your business faces day-to-day, some covers will be more relevant than others.

To make the process as easy as possible for you, Superscript’s online quote builder will guide you through the options best suited to your risk profile.

Here are some of the most common covers you might consider:

Public liability insurance

What does it cover?

If someone suffers an accidental injury or property damage as a result of your business, public liability insurance is designed to cover the costs of compensation and legal fees.

Who does it cover?

Public liability insurance could cover claims from customers, clients, contractors —– basically anyone who isn't an employee.

What businesses is it right for?

Any business that has contact with third parties who aren’t employees.

Find out more about public liability insurance.

Employers' liability insurance

What does it cover?

Employers’ liability insurance is a legal requirement for most businesses in the UK. It is designed to cover claims for accidental injury and property damage to your staff.

Who does it cover?

From full- time or, part- time staff to temporary workers, apprentices and volunteers. So whether you have a team of 9-5ers or some extra help over the holidays, you'll probably need employers' liability cover. Businesses that employ close family members may be exempt from having to have employers’ liability, but it’s important to check.

What businesses is it right for?

Employers' liability insurance is mandatory in the UK for almost all businesses employing one or more people. It's important to check your status, as if you are required to have this cover insurance but don't, you could face fines of up to £2,500 for each day you don't have it.

Find out more about employers' liability cover.

Business contents insurance

What does it cover?

From office equipment and technology to stock and specialist tools, business contents insurance is designed to cover your equipment from forcible theft, loss and damage, whether you’re in an office, out and about or working from home.

What business is it right for?

If you have office contents — like desks, chairs, printers, laptops or monitors — or technical machinery, portable equipment, documents and cash, business contents insurance might be the cover for you.

Learn more about business contents cover.

Business interruption insurance

What does it cover?

Business interruption insurance is designed to help cover lost income if something unexpected puts your work on pause. It can also pay for the additional costs needed to get your business back up and running.

What business is it right for?

Business interruption insurance isn’t a legal requirement, but it’s designed to help you recover quickly if the unexpected forces your business to pause. This cover might be useful to any type of business, wherever or however you work.

Read more about business interruption cover.

Professional indemnity insurance

What does it cover?

If a third party accuses you of professional negligence, having professional indemnity insurance may help to cover any associated legal costs.

What business is it right for?

Professional indemnity insurance is best suited to businesses that offer services. That's because it can cover legal and compensation costs associated with a business's failure to meet contractual obligations with a client.

The professional services it covers include designs, advice and consultations, so it can be relevant to a range of businesses from tradespeople to financial services firms.

Find out more about professional indemnity insurance.

Cyber insurance

What does it cover?

Cyber insurance is designed to support any business operating online or exposed to the internet from the risks associated with using and storing data.

Cyber insurance can cover the fallout from hacking, cyber attacks, data protection breaches and business interruption for downtime due to a security breach.

What business is it right for?

If you operate online or hold personally identifiable information for your customers — like names, contact numbers, email addresses or payment information — you may want to consider cyber insurance. In 2023, more than 3 in 10 businesses in the UK identified cybersecurity breaches or attacks.

Learn more about cyber insurance.

If you run your business from home, you might think you don’t need business insurance. But there are plenty of scenarios where business insurance might be relevant when working from home, for example, if you:

• Invite customers into your home for business
• Have expensive tech or specialist equipment
• Have a website or store personally identifiable information
• Provide advice
• Sell physical products or food

Additionally, often standard home insurance policies won’t cover the work you do from home unless you’ve stated that your home will also be used for commercial purposes.

Whether you’re incorporating yourself as a limited company or building an empire, there are three reasons you might consider business insurance:
1. You're required by law because you have employees
2. You’ve entered into a partnership, and they’ve asked you to have insurance
3. Some clients or customers may only work with you if you have business insurance

Learn more about limited company insurance.

Similar to limited companies, sole traders don't legally need business insurance unless you employ other people.

Many sole traders take out business insurance — partly to manage the risks of their work, and partly because associations, clients and customers often expect it.

Read more about sole trader insurance.