Risk is an everyday reality for a small business. Tight margins and big ambitions can create a vulnerability to events that may simply not affect a larger or more established organisation. Managing that risk can often be the difference between a business that survives to grow and one that falters. Small business insurance is an important part of ensuring that risk doesn’t swallow a business whole.

The importance of insurance

There are many unpredictable factors involved in starting or running a small business but if you’ve invested in insurance then you can at least remove some of the risk. Unhappy customers who decide to sue, injuries to employees or visiting clients, or the impact of a flood or fire, for example, can leave a business devastated. What small business insurance does is give you a buffer against the worst events that are completely outside of your control. That support could prove to be the difference between being able to continue trading and being forced to wind up operations – it really is as crucial as that.

Small business insurance

There are two common types of small business insurance to consider: general liability insurance and professional liability insurance. Depending on your business you might also want to invest in other more specialist products but, as a starting point, it’s these two that are likely to provide the most appropriate cover.

General liability insurance – this type of insurance is designed to give you cover for incidents and accidents that could crop up in the everyday running of a small business. So, for example, you might have a customer in your store who falls or slips and decides to make a claim against you as a result. This might not seem like a particularly expensive problem but injury claims can be very costly to a small business, especially if they run into claims for loss of earnings while the person recovers. General liability will also cover your business for damage to third party property or premises caused in the course of your business.

Professional liability insurance – events that occur as a result of business performance are the main focus for professional liability insurance. You may have made a mistake in your business that has caused a client to suffer a financial loss – or you may have failed to do something and that has had the same impact. Clients can blame businesses for a very wide range of issues and you may end up in court as a result. Professional liability insurance will give you a backup when it comes to covering the costs of settling a claim, from the settlement amount itself through to the legal costs involved.

Without small business insurance the kinds of mistakes or accidents that could occur every day have the potential to cause havoc for your operations. If you’d like to know more about what small business insurance will cover and which policy is right for you please get in touch.