It may appear a little confusing at first look, but deciding on the most appropriate insurance cover for your business is a fairly straightforward affair once you have sorted through a few facts. This is a whistle-stop guide to help small business owners and sole traders build up a picture of what cover to select.

If your business brings you into face to face contact with the public, either in your own premises or theirs (including their homes), you should take out Public Liability Insurance. This protects against compensation claims in the event of any accident or damage which you are held responsible for by the client. This could be anything from a client or customer tripping and sustaining an injury while on your premises, or some form of accidental damage caused by you whilst visiting a client’s office or home.

If you have even a small number of employees, you are obliged by law to take out Employer’s Liability Insurance. And it is worth it – it will cover you against the cost of damages and legal fees if any of your staff are injured or fall ill at the workplace. You must be insured for at least £5 million, but most insurers will cover you for £10 million.

Professionals like lawyers or psychotherapists who dispense advice should seek Professional Indemnity Insurance, which protects against claims made on the basis of allegations of negligence or poor advice. Finally, if you sell a product which is found to be faulty or dangerous, Product Liability Insurance will cover the costs of any damage claims.