Even though your business is off to a flying start, you’ll be run off your feet doing things to make sure it keeps on growing. Whether it’s sending invoices, networking, advertising or going out there and getting the job done for your customers, starting a business is a busy time, so it’s easy to see why taking out a commercial insurance policy is probably at the bottom of most business owners’ to-do lists.

However, inadequate insurance could have a devastating impact on a business should the worst happen. An Association of British Insurers (ABI) report shows that insurance claims paying out for damage and accidents are prolific. For example this reports that in 2011, British insurers paid out a staggering £3.7 million a day (£1.4 billion that year) to businesses for damage to their property, and £5.9 million a day (£2.2 billion that year) for liability claims such as accidents at work.

Large firms may be able to absorb the legal costs if they do not have adequate commercial insurance to protect them, but for others it could mean a severe restriction to growth or even worse, the end of their business. Commercial insurance provides a safety net so a business can continue to thrive, even if the worst happens. This safety net can range from protection against compensation costs to payments to cover repairs and loss of earnings in the event of unforeseen circumstances like theft, fire and flood.

It is not a legal requirement to take out business insurance, except in the case of firms who employ UK-based workers, who must by law have Employers’ liability cover worth at least £5 million. This provides protection should an employee take legal action for an injury they suffered in the workplace for which the business is liable.

Other policies provide financial protection against compensation claims arising from the general public. For example, public liability cover protects against claims which may arise if a member of the public is involved in an accident on a firm’s premises, or if their property is damaged as a result of the business.