Business insurance: the basics

Protect your people with insurance

Small businesses are often dependent on the people who work for them - particularly the owner-manager. As a result you should assess whether you need insurance to protect yourself and your business in the event of key staff being unable to work.

You may also want to consider offering private health insurance or critical illness cover to attract and retain key staff.

Different forms of cover

• Key person insurance compensates your business up to a pre-agreed limit for the loss or unavoidable absence of crucial personnel - including the owner-manager. It may be appropriate if your business depends on a few employees.
• Critical illness cover pays a sum of money to specific employees or the business owner in the event of a serious illness such as a heart attack or stroke.
• Income protection insurance protects individuals by paying their salaries while they're unable to work.
• Private health insurance funds private healthcare for specific employees. As well as being an extra benefit of employment, it could help them to return to work more quickly after an illness by paying for rehabilitation treatment.

Although some of these may be available through a general insurance broker, it's generally best to purchase these types of cover from an independent financial adviser (IFA) who will be able to take account of your overall financial situation and planning. You can find an independent financial adviser through the IFA Promotion website - Opens in a new window. If you do choose to deal directly with an insurer, it's worthwhile checking that they are a member of the Association of British Insurers (ABI). Check that an insurer is a member of the ABI at the ABI website - Opens in a new window.

For information on these types of insurance, see our guide on how to insure your business - people, life and health.

You can also read about business insurance on the ABI website - Opens in a new window.

Subjects covered in this guide

• Introduction
• Get the right insurance for your business needs
• Insurance you must have by law
• Insure against common business risks
• Liability and professional indemnity cover
• Protect your people with insurance
• Insurance for businesses set up from home
• Reduce your risks and premiums

Print options - What are my print options - Opens in a new window

• Add guide to my print portfolio (print later as PDF)

Email options - What are my email options - Opens in a new window

• Tell a friend about this page
• Send me an email alert when this guide changes