- Business insurance protects you from claims, accidents, theft and interruption of income.
- The cover you need depends on what you sell, who you employ and where you work.
- Read exclusions and limits before you buy and use a licensed insurer or broker.
The Short Answer
Business insurance pays when something goes wrong, such as a customer injury, a damaged stock room, a client claim or a cyber attack. You do not need every policy, but you should know your biggest risks and cover the ones you could not afford to pay yourself. Some cover is required by law in certain places or by landlords and clients, so check the rules where you operate. This is general information, not insurance advice.
Common Types of Cover
| Cover | What it may protect against |
|---|---|
| Public liability | Injury or property damage to other people because of your business |
| Professional indemnity | Claims that your advice or service caused a client a loss |
| Property and contents | Your premises, equipment and stock against fire, theft or flood |
| Business interruption | Lost income if you cannot trade after an insured event |
| Employer's liability or staff cover | Injury to employees, where required |
| Cyber insurance | Costs after a data breach or cyber attack |
Match Cover to Your Business
A shop needs stock and premises cover. A consultant or designer needs professional indemnity. A caterer needs liability cover. A business that stores customer data should think about cyber risk, and our guide to cybersecurity basics will help you reduce it.
How to Decide What You Need
List what could go wrong, how likely it is and how much it would cost you. Insure the risks that would be very costly. For small risks, you may prefer to build an emergency reserve instead. Ask clients, landlords and the authorities whether any particular cover is required.
Read the Fine Print
Check the exclusions, limits, excess and conditions. Some policies require you to keep security measures or records, and a breach can reduce the payment. Make sure the sum insured reflects the real value of your stock and equipment.
Choose a Licensed Provider
Use a licensed insurer or broker, compare quotes and ask how claims are handled. In Nigeria, insurers and brokers are licensed by the National Insurance Commission (NAICOM), so you can ask to see their licence details. Keep your policy documents, a list of assets with photos and receipts in a safe place, ideally with a backup copy.
Review Each Year
Update your policy when you hire staff, move premises, add services or buy expensive equipment. Related reading includes our guides on life insurance and invoice financing.
Common Mistakes to Avoid
Assuming a home policy covers business activity, insuring the property but not the stock or equipment, ignoring liability for customers and clients, and not updating cover as the business grows are common mistakes. Reading only the price and not the exclusions is another.
Frequently Asked Questions
Do freelancers need insurance? Many benefit from professional indemnity or liability cover, especially if a client could claim for a mistake.
Is a home-based business covered by home insurance? Often only partly. Ask your insurer in writing.
What is an excess? The amount you pay on each claim before the insurer pays.
Can I change my policy later? Usually yes, and you should update it when your business changes.
Action Checklist
- List the biggest risks to your business
- Check which cover is legally or contractually required
- Compare quotes from licensed providers
- Check exclusions, limits and excesses
- Photograph and list your assets
- Store policy documents safely
- Review your cover once a year
