Different types of business insurance cover different risks. Public liability insurance covers compensation claims made by a member of the public, while professional indemnity insurance covers you if you are sued by a client. Employers’ liability insurance covers compensation claims from employees.

What does Business Insurance cover?

Each type of business insurance is designed to cover a different set of risks that you face in the course of running your business.

  • Public liability insurance can cover your business if a member of the public makes a claim against you for injury or damage. Your insurance can cover the cost of legal fees and compensation payouts, up to the limit of your policy.
  • Professional indemnity insurance can cover compensation claims made against you by a client because they believe you have given bad advice or made a mistake in your work. This can include things like mishandling client data.
  • Employers’ liability insurance can cover compensation claims lodged by an employee for injury, illness or damage that they have suffered due to their work.
  • You can also choose to cover things like your business building, contents, equipment, tools, and stock in case they are damaged or destroyed.

The amount of insurance you need depends on your business. Sometimes your client contracts or your regulatory or professional body will specify a particular level of cover. Most businesses with employees are legally required to have at least £5 million of employers’ liability insurance.

When you’re deciding how much cover you need, you should think about the size of your contracts and the scope of the work undertaken by your business: what level of compensation payments may you face if something goes wrong?

You should also check the handbooks of your professional body or regulator, as some set minimum cover levels for their members.

If you are insuring your business buildings, you need to think about how much it would cost to rebuild your premises from scratch, and if you are insuring your business equipment or tools your cover level is based on the cost of their replacement.

Mortgage Squared offers £1 million to £10 million of public liability insurance, and £50,000 to £2 million of professional indemnity insurance.

If you have any employees, you’re usually legally required to have at least £5 million of employers’ liability insurance. We offer £10 million as standard.


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