Business insurance is sold as a bundle of products with overlapping names. A few types matter for most small businesses and the rest depend on what you do.
Usually necessary
Public liability, covering injury or damage to third parties caused by your business. Frequently required by clients and by commercial landlords before they will contract with you.
Employers liability, which is legally required in many jurisdictions the moment you have staff.
Professional indemnity, if you give advice or provide a professional service. Covers claims that your work caused a loss. Essential for consultants, designers, accountants and similar.
Depends on your situation
Contents and equipment, if losing your tools or stock would stop you trading.
Business interruption, covering lost income when you cannot operate. Frequently overlooked and frequently the largest actual exposure.
Cyber insurance, if you hold customer data. Increasingly relevant and worth reading carefully, since exclusions are extensive.
Product liability if you sell physical goods.
How to think about it
Insure what would end the business, not what would annoy you. A claim you could absorb from cash is cheaper to absorb than to insure against.
That means higher excesses on small risks and adequate cover on the large ones.
What to check in the policy
The exclusions, which is where disputes come from. And whether the cover limit is per claim or in aggregate across the year, which makes an enormous difference.
The caveat
Requirements and product names vary by country. This describes the general categories rather than any specific market.