Most small businesses are either uninsured or insured for the wrong things. The covers that actually matter are the ones protecting against events that would end the business rather than inconvenience it, and the most common failure is not the absence of a policy but discovering, at claim stage, that the policy never covered what happened.
Five covers, in the order most businesses need them.
Public liability and professional indemnity
Public liability covers injury or damage you cause to third parties. Landlords, event organisers and corporate clients increasingly require it before contracting, so it is often the cover that unlocks work rather than only protecting you.
Professional indemnity covers loss caused by your advice or professional work. If you advise, design, specify or consult, this is the cover that matters most, and general business policies do not include it.
Assets, stock and business interruption
Cover for premises, equipment and stock against fire, theft and damage. Insure for replacement cost rather than what you paid, and update the schedule when you buy equipment, since claims are reduced where the sum insured is too low.
Business interruption is the one most owners skip and most need. It covers lost income while you cannot trade after an insured event, which is usually what actually ends a business rather than the damage itself.
Vehicles, goods in transit and cyber
A private motor policy generally does not cover commercial use. If you deliver, the vehicle needs commercial cover, and customer goods you carry need separate goods-in-transit cover.
Cyber cover pays for investigation, notification, legal costs and interruption after a data breach or fraud. Insurers increasingly require specific controls as a condition, such as two-factor authentication and tested backups, and not having them can void a claim.
Read the exclusions and check the provider
Policies are defined by what they exclude. Common ones include unoccupied premises, pre-existing defects, known risks not disclosed, and losses arising from controls you said you had and did not.
Disclose accurately: non-disclosure is the most reliable way to have a valid claim declined. Confirm any insurer or broker is authorised with the Financial Sector Conduct Authority before buying, and where the business holds personal information, remember that data protection duties under the Information Regulator apply whether or not you hold cover.
Frequently asked questions
Which insurance should a small business get first?
Public liability, because clients, landlords and event organisers require it, followed by professional indemnity if you advise or design.
What is business interruption cover?
It replaces lost income while you cannot trade after an insured event, which is usually what ends a business rather than the damage itself.
Does my car policy cover business deliveries?
Generally no. Commercial use needs specific cover, and customer goods need separate goods-in-transit cover.
Why do valid claims get declined?
Usually non-disclosure, under-insurance, or missing controls the insurer required as a condition of cover.
How do I check an insurer is legitimate?
Confirm the insurer or broker is authorised with the financial sector regulator before buying anything.
Further reading
Originally published in May 2018. Updated September 2026 into a guide to the business insurance a small company actually needs.
