Setting yourself up in business can be a complicated process and the thought of being the cause of an accident or your services being seen as negligent is the last thing on your mind. Thankfully, these things don’t happen very often, but if they were to happen would your business be ready for the financial consequences? That is where liability insurance comes in, specific insurances put together for companies to cover them should they become part of a legal dispute.

Liability insurance comes in a variety of forms, for example, public liability insurance, employers liability insurance and professional indemnity insurance amongst others. There are plenty of cheap public liability insurance policies available with a large number of providers offering great value for money packages, so it pays to shop around.

Public liability insurance is useful if you have premises that your customers visit, such as a shop or showroom, or if you go out to provide services to your customers on their property such as contractors, plumbers or electricians for example. With a policy in place, if your customer were to fall and injure themselves on your property, or your work is seen to cause any kind of damage to your client’s property, you would be covered against any corresponding compensation claim.

Likewise, employers liability insurance can cover you if your business has employees. Should an employee have an accident at work or suffer from an illness caused by the kind of work your business undertakes, they have a right to claim for compensation. If this were to happen, could your company afford to pay both the legal fees of a claim and any additional compensation payout? Liability insurance can help your business meet these unexpected costs and settle any damages.

If your business is more of a skills based industry, such as consultancy, journalism or financial advice, you will definitely need professional indemnity insurance. The policy works in the same way as the others, in that if a customer believes you have been negligent or a mistake is made that results in your client suffering financial loss and makes a claim against you, you will be covered for any legal fees and settlement costs.

The majority of these policies are compulsory for businesses and shouldn’t be over looked. For some smaller businesses liability insurance isn’t a necessity, however, many companies choose to take up policies for added security and peace of mind. For all policies, premiums are usually based on business size, industry sector and previous claim rate so getting some advice and looking around at all the insurance providers available is the best idea. This way you are sure to find the right policy tailored exactly to meet your business insurance needs.


  1. I hadn’t thought much about needing liability insurance, but sounds like it might be a smart thing to have, especially if I start getting bigger.

    thanks for sharing!

  2. retirebyforty Reply

    I have an umbrella policy. It’s nice to know I have some protection in case something happens.

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