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Eight out of every 10 business fail within the first one and a half years of being launched, according to a report by Bloomberg. While there are many causes for this, one of the biggest is the failure to manage risks that can be easily done through purchasing insurance policies. Any business, be it based online, at home or in a busy office, is sure to encounter risks: fire, vandalism, accidents, equipment breakdown, and extreme weather conditions are but a few.

Unlike large businesses which have amassed wealth over the years, small businesses, which account for 99% of business enterprises in the UK, can be crippled if forced to incur large unexpected expenses. It is for this reason that getting an insurance coverage should be on top of your list when it comes to things to consider for your startup. However, there are dozens of policies available and finding the ones that are right for you could be hectic. Luckily, here is a guide of the common policies for your micro business or small-to-medium enterprise (SME).

Liability Insurance

Liability insurance for small businesses can be divided into two: general liability insurance and professional liability insurance. The first covers damages and protects your business in case your services, products, employees or you yourself cause property damage or bodily harm to your consumers or any third party. Professional liability insurance, also known as Errors and Omission Insurance, on the other hand, covers damages resulting from the improper rendering of professional services. This is particularly helpful for businesses which involve giving advice like law and consultancy firms. 

Workers Compensation Insurance

Workers compensation is undeniably one of the most important types of insurance coverage. So important, in fact, that the government will fine you £2,500 for every day your business doesn't insure its employees. Essentially, workers compensation, also known as employee liability insurance cover, protects you from damages that may arise should an employee get injured in the line of duty. Most micro businesses hire up to nine employees while SMEs contract up to 250 personnel, according to a briefing by the House of Commons Library. Without this coverage, you will have to cover the medical bills for any injured employee out of your own pocket which can cripple your business venture. 

Medical bills can be quite costly especially if the injuries suffered require an elongated period of medical attention. By getting this insurance, you can rest assured your employee will get the medical services they need and a percentage of their earnings to help offset living expenses without burdening your business fund. In extreme cases where major bodily injury occurs, the insurance company pays a large one-time settlement to the injured employee or to their family in case of death in a bid to secure their financial stability.

Property Insurance

This particular policy covers any damage that may occur to your business property. These include fire, floods, vandalism, and so on. It covers the business buildings themselves, the furniture inside, documents and equipment say workout equipment in a gym or computers in a tech company. It helps you get back on your feet. As part of the policy, you might want to include a clause that covers the loss of earnings during the period which the business will be unable to operate.

Alternatively, you can opt for a Business Owner Policy (BOP). It acts as an umbrella policy and covers quite the multitude of risks from auto to property, liability, crime and business interruption depending on the needs of your business. It also happens to be cheaper than getting individual coverages. If the premium is however unmanageable, conduct a risk assessment operation and opt for covers that are vital to the operation of your business. When you decide to run a business, you automatically assume the responsibility of ensuring the wellbeing of your consumers, employees and stakeholders. Any mishap, even a minor one could have serious financial consequences and lead to the wiping out of your hard-earned assets.

It is for these reasons that securing insurance is extremely important, as it provides added safety in concerning incidences. Think of coverage as a safety net to catch you should anything happening and you'll be well on your way to safeguarding your company, allowing it to thrive.