Why is business insurance so important?

Running a business can be incredibly rewarding, but it also comes with risks. As a business owner, there’s a lot on the line: your income, your team, and the long-term stability of your company.

Having the right business insurance in place gives you a safety net to help your company keep operating smoothly if the unexpected happens.

Business insurance can help cover the cost of legal fees, compensation claims, or losses from theft, damage to property, or employee-related issues. In short, it acts as a financial buffer, protecting your business from setbacks and helping secure its future.

Why arrange business insurance?

Business insurance gives you core protection with the flexibility to add extras. From liability and buildings cover to personal accident or business travel, you can tailor policies to match your company’s risks and priorities.

Protect against the unexpected

Safeguard your business from risks like accidents, claims or damage, helping you keep operations running smoothly.

Reassure clients and partners

Show professionalism and build trust by having the right cover in place to protect their interests.

Meet legal requirements

Certain policies, like employer’s liability, are a legal must, ensuring you stay compliant and protected.

Peace of mind to focus

With cover in place, you can concentrate on growing your business instead of worrying about setbacks.

Protect your assets

From premises to stock and equipment, insurance helps cover the cost of damage, loss or theft.

Support your people

Cover for employees means your team is protected if the unexpected happens, strengthening loyalty.

What type of business insurance is right for your company?

Explore your business insurance options to find a plan that’s best for you.

Public Liability Insurance

Protect your business from claims arising from accidental injury or damage to property.

Professional Indemnity Insurance

Safeguard your work against claims of mistakes, negligence or breaches of professional duty.

Employers’ Liability Insurance

A legal requirement for most employers, safeguarding your business against staff injury or illness claims

When do I need business insurance?

Business insurance is there to protect your company, your staff and yourself from unexpected events. In some cases, it’s legally required, and in others, it’s highly recommended to reduce risk.

The main legal requirement is employers’ liability insurance. If you have any staff, you must have this cover. It protects you if an employee gets injured or becomes ill because of their work. Failing to have it can lead to fines and even prosecution.

Even if insurance isn’t legally required, many businesses choose to take out extra cover to protect against common risks. You can arrange public liability insurance to protect your business if a customer or member of the public is injured, or their property is damaged, because of your business. Also, professional indemnity insurance covers you if a client claims you made a mistake or gave poor advice that caused financial loss.

Other insurance you may need to properly protect your business includes:

  • Business interruption insurance: Helps replace lost income if your business can’t operate due to fire, flood, or other unexpected events.

  • Buildings insurance: Covers the physical premises of your business, including damage from fire, flood or vandalism.

  • Contents, stock and equipment insurance: Protects your office, stock or tools from damage or theft.

  • Business health insurance: Provide private healthcare insurance for employees, or tailored cover for self-employed, helping with faster treatment, recruitment, retention, and reducing downtime.

  • Business life insurance: Protects your business financially if a key employee or owner dies. Can cover loans, replacement costs, or business continuity needs.

  • Business travel insurance: Covers employees when travelling for work, including medical emergencies, trip cancellations, and lost belongings.

Even if you’re a small business or sole trader, having the right insurance can give peace of mind and help you bounce back from problems without devastating your finances.

What affects the cost of business insurance?

The price of business insurance isn’t the same for every company; it depends on your circumstances and the level of cover you choose. Insurers look at things like:

The size and type of your business

Larger businesses or those in higher-risk industries usually face higher premiums.

Your claims history

If you’ve made claims in the past, this can increase your costs.

Your location

Where your business is based can affect your level of risk.

The amount of cover you need

Higher cover limits mean higher premiums, but also greater protection.

How long you’ve been trading:

A well-established business may sometimes pay less than a new venture.

You can also tailor some types of business insurance policies with add-ons, such as personal accident and legal expenses cover. These optional extras will increase the price but can give you valuable additional protection.

Business guides

Answering your questions about business insurance

Page updated on 13th November 2025, Reviewed by Richard Groom