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I need to make sure my business is properly insured...

While the business insurance you need by law is usually fairly minimal, it can pay to have extra protection in a crisis. But choosing from the wide variety of optional schemes can be difficult. Small businesses should consider two main types of insurance: policies that cover you against common risks, such as fire or theft, and specific insurance that protects you against the risks your particular business faces, such as public liability insurance.

The key to finding out what to pay for is a good insurance broker. The British Insurance Brokers' Association (BIBA) website will help you find an independent registered broker in your area or a broker who specialises in your type of business. Your broker will tell you where your business is most at risk and help you choose the right policies and level of cover. While some brokers charge a fee, most get paid by the insurance company they recommend to you. Check your broker is regulated by the Financial Services Authority (FSA).

If you are an employer or you run company vehicles, you need insurance by law. Employers' liability insurance covers your business against claims from employees for accidents, injury or illnesses that occur as a result of their work. Third-party motor insurance will protect your business vehicles, and you should also make sure your own and employees' personal vehicles are covered if you use them for business.

You are advised to insure against the risks every business faces to its contents and premises, such as fire, flood and theft. Most standard contracts cover malicious damage, but 'all-risk' policies also cover accidental damage. If you are a tenant, make sure your landlord has covered their insurance responsibilities before you arrange a policy that fills the gaps. You can't insure against general wear and tear.

If you regularly transport goods, consider goods in transit cover, which will protect your stock against loss or damage on the road, by sea or by air. You may also need loss of cash insurance, which covers money on your premises or in transit.

Engineering policies cover most machinery, while sometimes you will need a specialist IT policy. By law, some types of machinery must be regularly inspected, so you may be obliged to buy engineering insurance. In case of disaster, business interruption insurance compensates you for expenses and loss of profits after a fire or flood, damage to machinery or even IT system failure.

If you depend on a few significant employees, consider key man insurance. This protects you against loss of profit in the event of their absence or death. These policies also usually cover owner-managers.

Trade-specific insurance takes a variety of forms. Many business sectors, such as law, financial services and accountancy, need professional indemnity insurance. This protects against action taken by other businesses or by members of the public who believe they have been given bad advice.

If you work as a tradesman or customers visit your premises, you should seriously consider public liability insurance. This covers your business against claims of loss or injury from the public, as well as legal expenses. Increasingly, large business and public organisations will ask to see a certificate of public liability insurance before taking on a contractor. For a small firm, the costs are usually low. A very few small businesses, such as horse-riding stables, are legally obliged to be insured.

Product liability insurance is also available to cover the costs of damage or injury caused by products you make, sell or repair. Product recall insurance will help in the event that your products are defective.

Additional policies include commercial legal insurance, which covers some legal expenses, and credit insurance, which will protect you - partly - against customer bankruptcy. As with all optional insurance, weigh up how likely the risk is to affect your firm against the cost of the policy.

Once you have made your choice, ask your broker to check that your insurance is right for the region in which your business operates: English, Scottish and Northern Irish policies often differ in minor aspects.

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