Don’t cut corners when insuring your business

Scrimping on insurance policies for your business is a false economy, says David Prosser.

Businessman in flooded office
Buildings insurance will pay off if your premises suffer damage
(Image credit: © Getty Images)

Businesses cancelling insurance policies to reduce their costs may be making false economies – and even leaving themselves exposed to legal trouble. Research suggests that 51% of small companies stopped paying for at least one type of insurance at the height of the Covid-19 pandemic.

It is illegal to operate without certain types of insurance, and there are fines and other penalties for those who are uninsured. In particular, if your business has even one employee, it must take out employers’ liability insurance, which will pay out if a member of staff is injured at work or becomes ill as a result of their employment. In most cases, you must have at least £5m of cover.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.