This includes any compensation claims that are made against your business. In order to start looking at quotes, you will need to consider the types of risk your business faces. These will differ according to the industry in which your business operates, whether or not you employ other people and the extent of any legal liability you may face.
As a simple example, you may be unable to trade if something happens to your stock, your premises or any essential equipment.
You will likely need more than one type of business insurance and it will be your decision as to which best suits your needs, so make sure that you consider every eventuality. It isn't usually mandatory to hold business insurance, unless you employ other members of staff in your business. In this case, then you will almost certainly need employer's liability insurance as a legal requirement. A standard cover amount for this type of insurance is £5 million.
Public liability insurance will cover risks such as an accident involving a member of the public on your premises, perhaps a customer slipping on a wet floor in your shop. You might need to have certain types of business insurance in place before you enter into a contract with another business or client.
Professional indemnity insurance is a type of business insurance that certain professions may be required to hold by industry regulators or the law.
As with every other type of insurance, premiums will vary according to a number of variables. These will include the type of work that you do and the associated risks. An insurer will consider the length of time you have been trading and any previous claims, whether your work is dangerous and the value of your inventory and equipment. This is why it can be so important to use a trusted broker who has a strong relationship with the insurers they use.
You will be able to adjust your premiums according to the amount of cover you require. The best way to decide upon this amount is to work out roughly how much you would need if everything that could go wrong, did - all at once.
If you are planning a business but have yet to start trading, you can buy insurance in advance, but check that you already have any mandatory licences or accreditations in place. If you start trading without them, your insurance might be invalid.