What business insurance do I need?

A guide to insurance for Ecommerce businesses.

When it comes to starting your business, oftentimes you can be left in a tangle of advice about what you do and don’t need to be compliant and legal! Please, don’t panic. We’ve made a handy guide as to which insurances you need and when for your business. Small Business Insurance Small Business Insurance is a form of insurance you can purchase, however, it’s more of an overall term for a policy which covers many different insurances. Small Business Insurance usually gives you the option to add on many of the types of insurance we explain below. Think of it as the pick and mix of insurance policies where you just choose what you need to cover. Employers’ Liability Insurance If you are a sole trader, the sole director of a limited company or you own more than 50% of the shares but you have zero employees, you do not need Employers’ Liability Insurance. Now, if you do have employees, you need this cover. Employers’ Liability Insurance or EL will cover your business in the event that one of your employees claims they’ve suffered illness or injury whilst working for you. It covers legal and compensation costs when defending your case. If you do not have cover the HSE could fine you £2,500 for every day you go unprotected. Ouch! Public Liability Insurance This form of insurance is one of the most popular insurances amongst small businesses, and it’s no surprise. Public Liability Insurance (PL) covers you in the event that you or one of your team causes injury or property damage to a member of the public. If this were to happen, without insurance you could face hefty legal fees and compensation costs, PL will cover these costs, potentially saving you millions! It’s also worth noting that if you sell on a stall or at fairs, you will most likely be asked to provide proof that your business has Public Liability Insurance. Product Liability Insurance Not to be confused with the above, product liability insurance is important for those who manufacture their own goods or products. Product Liability insurance covers you in the instances that; your product has caused personal injury, someone has experienced loss or damage to property due to your faulty product or unforeseeable circumstances that your quality control systems didn’t identify. Also, you can be held liable even if you didn’t manufacture the product but your business’s name is on that product. So watch out! Contents and Portable Equipment Insurance As mentioned previously, you may work outside of a fixed location, whether that’s at a stall, at a concession or doing business on the road. Every business has technology that it relies on to run smoothly, this is where contents and portable equipment insurance comes in. Standard contents insurance will cover you for everything you keep on site like furniture and fixed equipment. Portable equipment covers all the things you take out with you such as mobile phones, laptops, tablets and cameras. This insurance general covers theft, fire, flooding, loss or damage which, if not covered, could send your business grinding to a halt and we don’t want that! Stock Insurance Sometimes your stock isn’t always in one place, it could be at home or in a warehouse, so may not be covered under general contents insurance. Stock insurance covers the value of your stock following damage from causes such as flooding, fire or theft. You may find that stock insurance is offered as an extension of your contents insurance but it’s always worth checking. The cost of losing stock could be huge which is why this useful insurance could be incredibly valuable for your business. Health and/or Travel insurance Now more than ever, there is a risk of illness to anyone travelling for business purposes. If you travel overseas for your business you will need travel insurance or potentially face getting financially stung if you’re unwell while away. Travel insurance will cover medical costs as well as the cost of getting you home (and back to business) if you fall unwell while away. Health insurance gives you more freedom and flexibility should you fall ill within the UK. Shorter NHS waiting lists, a choice of hospitals and faster diagnosis meaning you can get back on your feet and back to your business much faster! Goods in Transit Insurance Hopefully, when your business is up and running, you’ll be sending parcels out here, there and everywhere which is why we recommend Goods in Transit Insurance. Goods in transit is an umbrella term for 2 forms of coverage; - Shippers Interest Unfortunately, as we’ve most likely all experienced, parcels can go missing or turn up damaged. That’s where Shippers Interest comes in. This insurance will cover your deliveries should they go missing or turn up to your customer damaged. Be aware that not all insurance covers every item, you may find some items excluded such as instruments, paintings and optical equipment for example. Shippers Interest could really save your business big bucks as without it, you the seller are responsible for covering the costs of a package that goes missing or is damaged. - Cargo insurance Cargo insurance covers shipments from physical damage or theft. This cover ensures that the value of goods are protected against potential losses which may occur during an import, export, domestic carriage or during incidental storage. Any business that manufactures or buys/sells finished products, raw materials and components should look into cargo insurance.

So there’s a look at some of the most important insurances you might need when starting your new business venture. Like most things in life, a great deal of insurance is a choice, however it is worth remembering that when you need it most, insurance can be more valuable than ever.

Which business insurance would you never go without?

Did we miss any that you would recommend?

Let us know in the comments below.

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