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Business insurance, apart from being mandatory for most companies with working staff, is generally not a legal necessity. But it is certainly worth keeping in mind that in some cases, business insurance is certainly a requirement – although it is not an automatic one. For instance, if your company has recently started trading, you may well need to take out a business loan at the start-up stage, to help you cover your staff costs, and / or the cost of equipment. Business insurance would provide cover for any liability claims made against you by a potential future customer.

So why might you require business insurance? At the start-up stage, where your business faces the financial risk of new business owners taking out loans and issuing shares, it is important to consider how liability insurance protects you. If a potential borrower were to take out a loan against your company stock, they could potentially sue you – and rightly so. Public liability cover is also an absolute necessary legal requirement for small companies whose assets are likely to be exposed to a wide range of different risks. For example, a plumber who is due to make repairs to a drainage pipe would have to take out public liability cover, in the event that he caused damage to a customer's property or someone else's property.

However, as mentioned earlier, business insurance isn't always a legal necessity. Some forms of coverage are generally not required, because they could be expensive or complicated to arrange and maintain. The two main types of coverage are liability cover and public liability cover. Public liability covers the liability that your company would be held responsible for if a customer were injured or harmed whilst using your services – this includes injury or death sustained whilst visiting your premises, or damage caused as a result of faulty service or equipment use. Liability insurance doesn't usually protect against defamation or libel, but does cover you in the event that a customer makes a complaint about your conduct, which may affect your reputation.

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To protect yourself against the financial consequences of having insufficient public liability insurance, you need to ensure that you have adequate product liability insurance. This particular type of business insurance is designed to protect your brand name, goodwill and reputation from claims made by customers who are dissatisfied with your products or services. In the UK, public liability insurance requirements will not normally apply to the supply of goods or services to the domestic market, but may apply to imported products. Products liability is considered to be one of the most important benefits of purchasing business insurance in the UK, because it enables you to ensure that you do not become the next victim in a case of consumer negligence. The law tries to prevent the situation where a supplier has to pay a large fine to a customer for distributing a defective product, and to prevent the situation where a large number of people suffer injury or lose their lives as a result of defective products.

There are two main types of business contents insurance – buildings and liability cover. Borough protection is often required by business owners, in order to secure their assets in the event that they suffer damage or are destroyed. Your buildings insurance covers the shell of the building and its contents such as furniture, equipment and electronic equipment. You may also require public liability insurance if you intend on selling goods into the consumer marketplace. This particular type of insurance protects your company against claims by customers who have been injured while using your products or services.

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If you are running a business where you use professional indemnity coverage, you are still covered even if one of your workers is careless and causes damage to your business materials. Although you might be tempted to cancel your coverage, this is actually illegal in some parts of the United Kingdom. Professional indemnity covers are typically used by small businesses such as restaurants and shops, because they typically do not employ many staff members. When you are working in a coworking space, you do not need to take out a policy that will cover you if one of your employees causes damage to company property.

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