Insurance is essential for protecting your business but there’s no doubt it can be baffling territory – particularly for complex businesses or the newly self-employed.
Lots of jargon, risk analysis, and different covers can leave many small business owners feeling confused. Not only that, it’s an expense for something you hope you’ll never need – but yet gives vital protection from everyday risks.
This guide explains what to look for to help you find the right insurance and the right provider. And we interviewed some of our own in-house insurance experts to learn more about the process.
Map the risks for your business
You know your business better than anyone else, which means you understand what can go wrong and how that could impact your bottom line – and reputation.
Taking the time to audit the risks associated with your business activities is an essential part of choosing the right insurance cover you’ll need.
For example, are you working at height or using chemicals? Do you represent clients or handle data? Could someone get injured as a result of your work?
A risk map can help you.
Risk examples
accidents can happen anywhere, so public liability covers injury or damage to a third-party as a result of your work
giving advice or professional recommendations to clients can go wrong or even cause a client to lose money – professional indemnity protects you from the risk if you’ve been negligent
How to choose the best insurance for your small business
Covers
Think about all the potential risks you could face and choose the covers that your business needs. Some companies like Simply Business let you build a tailored quote so you only pay for what you need.
Reputation
Check online review sites like Feefo to find out more about how customers feel about different providers and insurers.
Compare
Compare quotes with different insurers to find a price and cover level that works for you.
Choosing your cover – expert tips
Insurance Product Manager at Simply Business, Greg Caswell-Smith, shares his expert knowledge on policy limits, disclosure accuracy, and the value of specialised cover.
Coverage and policy limits
All covers show limits to how much will be paid out in the event of a successful claim. Choosing a lower limit means you’ll only be covered up to that amount. But this can reduce your premium. A higher limit costs more but offers greater coverage.
Greg says: “When choosing cover limits, don’t just focus on the premium. Think about the largest potential loss you could face. Factor in your biggest contract values, the total value of your assets, and the potential for multi-million pound personal injury claims.”
The cover limit you choose is up to you, but it’s a good idea to think about the cost of a worst-case scenario and how to protect your business if anything goes wrong.
“When choosing cover limits, don’t just focus on the premium. Think about the largest potential loss you could face.”
– Greg Caswell-Smith, Insurance Product Manager
Accurate disclosure
Disclosure in insurance is the bit where you tell your insurer about you, your business, and your business activities. This is what’s used to determine the premium and risk level of your business.
You’ll need to give accurate information on things like claims history, what your business does, location, employees, and some financial information. This can all impact your premium.
Getting this right is essential to avoiding underinsurance – a key reason why some claims can get rejected.
Greg says: “Inaccurate disclosure risks invalidating your policy.
“Under the Insurance Act 2015, businesses have a duty to make a ‘fair presentation of risk’. If you don’t tell the full and accurate story then you might not get the cover you need or risk a claim not being paid. You wouldn’t insure your Ferrari as a Fiesta, so don’t take that chance with your business.”
Specialised cover
Some insurers offer specialised cover to make sure the types of events covered by your business insurance are applicable and relevant to what you do every day.
Greg explains: “Specialised cover ensures that the specific nuances of your trade, like professional advice for consultants or hot works for plumbers, are explicitly protected. If you’re not sure, contact a broker, tell them about what you do, and the covers you need.”
This can become more important for complex and niche businesses. For example, if your business involves operating heavy machinery or you handle large amounts of data, then you might need to discuss your policy in more depth before choosing your cover.
“You wouldn’t insure your Ferrari as a Fiesta, so don’t take that chance with your business.”
– Greg Caswell-Smith, Insurance Product Manager
Insuring your small business
Once you’ve considered all the risks and compared quotes, it’s time to find the best business insurance for you.
Business insurance can be complex, so talking through with an expert can help. Simply Business has a UK-based team available over the phone who can help you understand your options. You can buy business insurance and compare quotes from leading insurers with Simply Business – we protect over 1,500 trades too.
Photo: Simply Business
Why choose Simply Business for your business insurance?
Compare and buy in minutes – documents arrive the same day
Help from UK-based experts online or over the phone
9/10 customers rating us ‘good’ or ‘excellent’ on Feefo
Our UK-based claims helpline is available 24/7
Key takeaways from the experts
compare business insurance providers and quotes to find your price
look at the risks your business might face first
make sure information you share with your insurer is accurate
choose policy limits that you need and consider the cost of a worst-case scenario
consider all cover options, including those more specific and tailored to your industry
“Choosing insurance based solely on price might not be the best policy for your needs. A quality provider offers the breadth of cover to protect your core liabilities while providing valuable additional covers, like cyber or legal protection.
“Ultimately, the right insurance isn’t just a policy, it’s peace of mind for your business that could help you be able to operate after the worst happens.”
Greg Caswell-Smith, Insurance Product Manager at Simply Business
Catriona Fuller is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry-specific professionals who may better understand your business’s needs. Read our full disclaimer
