Every business is vulnerable to risks such as claims for compensation as a result of injury or negligence, contractual disputes, accidental damage, fire, flood or theft. It is important for business owners to consider the risks their business may face and take out appropriate insurance cover.

Employers' liability insurance

Employers' liability insurance is mandatory for most employers to cover costs arising from compensation claims by workers who suffer illness or injury as a result of their work activity. The legal minimum level of insurance cover is £5 million.


See also: An overview of employment law for rural business owners


Business vehicle insurance

All vehicles that are used for business purposes must, by law, be covered by third-party motor insurance under a policy that includes business use. Employers have a legal obligation to check that employees who use their own vehicles for business purposes have the required insurance cover. Some businesses will need specific commercial vehicle insurance policies to cover certain vehicles used on farming or industrial premises.

Public liability insurance

Public liability insurance covers the cost of compensation claims arising from death or injury to members of the public, customers and suppliers, or damage to someone's property occurring as a result of business activity.

Public liability insurance is not mandatory unless a business is offering horse riding to members of the public. However, this type of insurance is advisable for any business owner who has contact with members of the public or who visits clients or suppliers at their property.

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