Starting a new business is an exciting adventure, and developing a strong company brings great opportunities, but it comes with inherent risks. Without the right insurance coverage, unforeseen events could lead to financial losses or even force you to shut down. Navigating your business relies on you to be as best prepared for all eventualities and insurance is vital to safeguard your business and your customers. Current challenges include the rise in cyber crime and fraud, employer’s safety and welfare, and theft and property damage. Luckily, insurance companies offer great products that can offer protection and assistance if such unfortunate events occur.
Here are the top 3 products I recommend that every new business needs.
Cyber Insurance
In 2024, UK businesses experienced 7.78 million cyber attacks with the average annual cost of cyber crime for businesses being £1,120 per victim. An estimated 22% of businesses have experienced cyber crime in the last 12 months, with 50% of businesses identifying potential breaches or attacks. It’s not just the financial impact that businesses face, reputational damage can be just as severe, especially if customers lose trust in how their data is handled.
That’s where Cyber Insurance becomes essential. While policies vary between providers, most offer comprehensive protection against a wide range of cyber threats, including:
- Data breaches: Covering the costs of notifying affected individuals, credit monitoring, and regulatory fines (where applicable).
- Cyberattacks: Including ransomware, hacking, malware, and phishing scams, with coverage for ransom payments, system restoration, and recovery support.
- Business interruption: Compensation for loss of income if your systems go down due to a cyber event, plus costs to keep operations running.
- Legal and forensic support: Access to expert teams to investigate the breach, advise on remediation, and manage legal and regulatory responses.
- Third-party liability: Covering claims from customers, clients, or partners whose data may have been compromised.
- Reputation management: PR support to help protect and rebuild your brand after an incident.
- Data asset restoration: Coverage for corrupted, deleted, or damaged digital assets.
Cyber Insurance also equips your business to respond swiftly and confidently in the face of growing digital threats.
A policy such as Tapoly’s Cyber Breach Response lets any individuals who may have been affected know there has been a data breach, with call centre services and monitoring specialists on hand for those who may have been compromised.
Employer’s Liability Insurance
The 2024 HSE Health and Safety at Work statistics revealed that 60,645 non-fatal injuries were reported by employees, and 1.7 million workers were suffering with work-related ill health. This loss of workforce and costs relating to workplace injury and ill health amounted to £21.6 billion.
As a business, you can implement safety measures, training, and proper workplace practices to reduce the risk of injury or illness among your employees. However, accidents can still happen. Employer’s Liability Insurance provides essential protection if a current or former employee makes a claim against you for bodily injury or illness caused during the course of their work.
This insurance typically covers:
- Compensation payouts for work-related injuries or illnesses
- Legal fees incurred while defending a claim
- Medical costs and loss of earnings for the employee
- Claims that arise even years after employment has ended
It ensures your business is protected financially while demonstrating your duty of care as a responsible employer.
Employer’s Liability Insurance is compulsory and must be obtained as soon as you become an employer or have two or more directors, with your policy covering at least £5 million. This applies if you hire staff (including part-time, temporary, or voluntary workers), use labour-only subcontractors, or operate as a limited company with multiple directors. For every day you are not properly insured, you could face significant fines up to £2,500 per day. However, it’s important to note that Employer’s Liability Insurance only covers claims made by employees. If a member of the public makes a claim, this would fall under your Public Liability Insurance.
Although £5 million is the legal minimum, most insurers offer a standard cover of £10 million. Many policies also include legal support and additional compensation coverage to ensure comprehensive protection.
With your employee’s safety a paramount concern in your business, it is vital that thorough safety procedures, training and support is offered. However, if the unexpected happens, Employer’s Liability Insurance helps protect your business from the financial burden of claims and the potential reputational damage that could follow.
Commercial Property Insurance
With theft and vandalism on the rise, over 26% of business premises have fallen victim to crime. Theft is the most prevalent, closely followed by burglary and vandalism. This equates to businesses losing a total of £12.9 billion.
Additionally businesses are also at risk of damage from fire, water and other natural disasters. In the past, storms have caused significant damage in the UK, with £146 million worth of damages claimed in the final quarter of 2024. These events can cause significant disruption, making commercial property insurance a vital safety net to help businesses recover quickly and minimise operational downtime.
While policies vary by provider, Commercial Property Insurance generally covers:
- Buildings – including the structure of your premises against fire, flood, storms, vandalism, and accidental damage
- Contents – such as furniture, stock, machinery, tools, and business equipment
- Office contents and equipment – which may be included or added as an extra, covering items like electronics, signage, money stored on-site, and more
- Business interruption (optional) – covering loss of income or relocation costs if your premises become unusable due to an insured event
However, it’s just as important to know what’s not typically covered:
- General wear and tear or gradual deterioration
- Damage caused by poor maintenance or neglect
- Losses due to incorrect valuations or underinsurance
- Damage caused by deliberate acts of the business owner or employees
- Flood damage in high-risk areas, unless explicitly included
A major concern for UK businesses is underinsurance. Studies have shown that nearly 50% of commercial properties are underinsured, and 67% of claims are reduced or rejected due to insufficient cover. That’s why it’s crucial to accurately estimate the value of your building, contents, and equipment — and review it regularly. Speaking with a reputable insurance provider can help ensure your policy reflects your true level of risk and exposure.
Whether you’re just starting out or scaling your business, choosing the right insurance policies is essential. Commercial Property Insurance, along with Employer’s Liability Insurance and Cyber Insurance, forms a strong foundation of protection against today’s most common business risks — helping your business stay resilient, compliant, and operational, no matter what comes your way.
AUTHOR BIO
Janthana Kaenprakhamroy
Janthana Kaenprakhamroy is the founder of leading insurtech Tapoly, the first on-demand insurance platform for the gig economy in Europe. Tapoly received the Innovator of the Year award at the UK FinTech Awards 2023, and was named Insurance Broker of the Year at the British Business Awards 2023 under her leadership. Janthana was featured in Forbes’ Top 100 Women Founders to Watch and named as one of the Top Ten Insurtech Influencers by the Chartered Insurance Institute, and has been honoured as one of the Most Influential Women in Tech for three consecutive years by ComputerWeekly.com.
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