A simples guide

How much does business insurance cost?

When you run a business you know that sometimes you need to speculate to accumulate. The same can be said for ensuring you pay out for the right sort of business insurance – because cheap doesn’t mean best or most suitable, it’s about getting the best value for your money and that means getting the cover you need at a fair price. But what’s included in your business insurance premium and is it enough?


Business insurance fees

Business insurance usually comes in packages that combine various different types of insurance policies – the one that’s best for you will depend on the nature of your business and the level of cover you need.

The amount you pay in premiums will differ according to your package and your insurer will also consider things like how big your business is, the number of people who work for you and also your previous claims history.

What do I get for my premium?

Typically, your insurance will cover you for compensating any claims made against your business, as well as the associated legal fees. The amount of cover that is included in your policy will depend on what you’ve specified or agreed with your provider.


What insurance do I need by law?

If you have employees, then you’re legally obliged to have employers’ liability insurance which covers you against any claims made by staff due to injury or illness through work. If you don’t have it, you could be fined up to £2,500 for every day you go without it.

It doesn’t matter if you’ve only got one staff member employed on a casual basis – as a general rule if you’re deducting National insurance and income tax as well as telling them what to do, where to do it and how long for – then you need employers’ liability insurance. You should be covered for at least £5 million but in reality most insurers will cover you for up to £10 million.

If you own vehicles in connection to your business, then you also need to have motor insurance by law. The minimum you can have is third party but if any of your vehicles were stolen or damaged by fire could you afford for it to be repaired or replaced out of your own expenses?

The only other legal requirement is if you run specific types of business such as a horse riding establishment – where you’ll need to have public liability insurance. If you’re in any doubt about your legal obligations or licence requirements, your local council will be able to help you. Of course any business that comes into contact with the public is advised to have public liability insurance as it’ll cover you for any claims against personal injury, loss or damage to property made by the public; but in most cases it’s not a legal necessity.

Your business is unique and the cover you need won’t be the same as someone else’s, that’s why most insurers will offer you packages where you can bolt on various types of cover. For example, if you’re an accountant or solicitor offering professional advice, you might consider professional indemnity insurance which will compensate clients for any losses made because of advice you gave them.

What else should I consider?

Some insurers will offer you optional extras such as debt recovery and help with contract disputes. These are worth considering if you think you’re likely to face tricky customers but this’ll add to the cost of your premium so really think if it’s for you.

Ultimately what’s right for your business is down to you, your business and the cover you need and how much your premium is, will be directly related to that. So let’s stop speculating and start comparing, you can do it online or ask for a callback from one of our experts – we’re here to help and make life simples.

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