At Tesco Compare we want you to find the insurance that is best for your business. We’re working with Simply Business to offer business insurance quotes and have put together this guide. It will help you distinguish your public liability from your professional indemnity and identify the types of cover you need and why you need them so that you can buy with confidence!

Business insurance is made up from several covers so most insurers will package them into one easy policy.

Public Liability Insurance

What is it?
Most businesses come into contact with other people and their property in the course of a business day. Therefore you’ll want to make sure that should an accident happen, you won’t have to pay out any money in compensation.

Public Liability covers you if, as a result of your business activities, a client or member of the public is injured or their property damaged.

Why do you need it?
If you were a plumber, for example, and some piping you fitted leaked and caused water damage to your clients’ property or that of their neighbours, plumbers’ public liability insurance should cover the cost of the damage.

Or if you own a shop and a customer slipped on a wet floor and injured their back, your public liability should pay for any compensation claimed.

Public liability claims can run into the hundreds of thousands of pounds, which could have a profound effect on your bottom line if you had to pay out the money yourself.

Employers’ Liability Insurance

What is it?
If your business employs staff (other than yourself or family members) the law says you need to take out Employers’ Liability insurance. This applies to part-time and contract staff as well as full-time staff.

Employers’ liability covers you for compensation claims from employees who have been injured at work or who have become ill as a result of their work while in your employment.

Why do you need it?
If, for example, an employee fell ill as a result of exposure to harmful chemicals used in your manufacturing plant, you could be liable to pay for medical bills and compensation. Employers’ liability is taken out to cover these costs as well as any legal expenses incurred.

Professional Indemnity Insurance

What is it?
A type of cover for professionals who give advice or provide a service to customers, Professional Indemnity covers your business for mistakes or negligence in advice you have given or work you’ve done for a customer, which has a negative impact on their business or personal life. If the customer claims compensation the insurance should cover any payments to be made and legal expenses.

Why do you need it?
It’s easy to make a mistake or an error in judgement in business. However, dealing with the consequences isn’t quite as easy.

If, for example you were updating some IT systems for a client and accidentally wiped their database, you would be likely to find yourself facing a large claim. The client would potentially have lost business and be expecting significant compensation but if you have Professional Indemnity insurance it should cover that cost.

Choosing your policy

When you are comparing insurance quotes here are some points to bear in mind:

• Read the policy wording carefully
• Check which situations are excluded from the cover
• Check which situations are specified as being included in the cover
• Note the amount of excess you would have to pay on a claim
• Make sure you have the right level of cover for your business
• Contact Simply Business’ insurance team for further information if you are unsure

What price and why?

Getting the right price for your budget is as important as getting the right cover. Comparing quotes will help you to find the cheapest option, however sometimes the cheaper options have exclusions and conditions that don’t fit with your business needs so it’s important to be sure what you are looking for.

The price of the insurance is based on many factors, including the level of cover you need, the types of cover you buy, the risk factor of your business, and how long you’ve been in business without raising a claim.

Some insurance companies will charge over the odds for specialist or high risk trades, so it’s worth getting lots of quotes to make sure you aren’t being overcharged.

Sometimes you end up with a higher level of cover than you need, for example £5m of Public Liability instead of £2m. If you are unsure about the level of cover that is right for your business, you can speak to one of Simply Business’ team who will be happy to provide more information.