Under the changes announced yesterday to National Insurance rates, both employers and employees will each be taxed an additional 1.25%. In his speech in parliament Boris Johnson’s reason for the
When you start or grow your business, you will need to consider the business insurances you need. Different insurances will ensure your business is compliant with the latest legislation.
For instance, Employers’ Liability cover is a legal requirement for most businesses with staff. Public Liability insurance is vital if you’re in contact with members of the public. You will need it to ensure your business is compliant. Professional Indemnity insurance is important if your business offers advice, such as professional or business-related advice.
What insurance types should I consider for my business to be compliant?
Firstly, think about and write down the kind of work you do. What services or products you want to offer your customers? Think about the risks of each service or product that you might need to cover. Consider if your business could face a compensation claim from an unhappy customer if they believe you have been negligent. Is there a chance a member of the public could be injured by your business and want to claim compensation? Do you work from your own offices or premises? What about the contents of your office or premises? The business equipment you need to complete your work and any stock you have should be insured against loss or damage.
Once you have your list, you can consider the types of insurance you need and narrow down the options. It is likely you will need to look at one, some or all of the following most common options.
Employers’ Liability insurance
If you employ staff for your business, you will probably be legally required to have an Employers’ Liability insurance policy. Therefore, you must consider it to ensure business compliance with the latest legislation.
This insurance covers compensation claims made by a member of staff because they’ve suffered injury, illness, or damage as a result of their work.
There are some companies which will be exempt from the legislation. This includes some businesses that only employ close family members or work with specific types of workers, like contractors. To see if you’re exempt, check the Health and Safety Executive (HSE) guidelines. If you are not sure, seek advice.
Public Liability insurance
Public Liability insurance is a must if you meet members of the public at any point. This could be at your premises as it could be when they visit you for meetings. It could also be elsewhere, such as at events or trade shows.
Public Liability insurance is there to help protect you against compensation claims for injury or damage made by customers, members of the public, suppliers or anyone working at your premises. Most businesses who expect to have visitors to the premises will require this insurance.
It is also sensible to check your client contracts as many require a stated level of Public Liability insurance.
Professional Indemnity insurance
Professional Indemnity insurance is important if your business gives advice or offers a professional service to other businesses. It is also important if you deal with client data or intellectual property. It is required by anyone who offers a service-type business. Should you make a mistake in the work you do for a client and your client loses money, or believes they suffer a loss of reputation and sues you, your Professional Indemnity insurance will cover the compensation claims and possibly legal costs.
Some professional bodies and regulators require their members to have this insurance. They may offer you an option to insure with their recommended supplier.
Key Person insurance
Sometimes known as Keyman insurance. This insurance protects businesses against the loss of profits if a key employee becomes terminally or critically ill or dies. Many business owners do not consider this insurance fully. However, if your reputation or sales pipeline depends on one or two key staff, then it is worth a look!
Business Legal Protection insurance
Business Legal Protection insurance – also known as Business Legal Expenses insurance – covers business legal expenses or prosecution fees for situations like HMRC tax investigations, employment tribunals, or civil actions brought under the Data Protection Act.
Given the rising number of tribunals, it is worth seeing if any of the professional bodies you belong to offer this as an option or add-on to their membership. It can be purchased as a stand-alone option but is often included with the insurances above.
Business buildings insurance
Whether you work from home or have separate business premises such as a garage, shop, office or restaurant, business buildings insurance should be a priority insurance for you. If you rent your premises, check with your landlord to see what’s already covered and agree if you need to cover anything specific.
Business contents insurance
You can also protect the contents of your business premises and the equipment and tools you and your team use. Should contents be damaged, destroyed, lost, or stolen, this cover will pay the cost of replacements or repairs. That will no doubt save you a huge amount of lost time and money.
If you hold any stock, whether on your premises or in storage, stock insurance will cover the cost of replacing it if it’s damaged, destroyed or stolen.
Business vehicle insurance
If you need a truck, van, or fleet of business vehicles to keep your business running, then you will need business vehicle insurance.
Product Liability insurance
Product Liability insurance protects you should a customer of yours suffer damage because of a faulty product you provide. You could be held liable for damage even if you didn’t manufacture the product. If you offer any products to customers via an e-commerce or high street shop, you must consider this insurance to be compliant.
Personal accident insurance
This is insurance is pretty much as it sounds. Personal accident insurance covers serious injury or death caused by an accident. It can pay out for lost income, medical costs, and hospitalisation, up to the limit of the policy. It is important to consider for any key members of your staff, or yourself if you are a sole trader.
If you are self-employed or run a business with employees, healthcare insurance is a sensible consideration. If time out your business for healthcare appointments or long waits for treatment mean losing work, impacting your wellbeing, or losing money, then your health is worth protecting. Similar applies to critical illness cover.
Income Protection insurance
This insurance is well worth considering if you are self-employed or are the key earner in your family. If you are off sick or injured, providers will pay out a fixed sum. Terms and amounts will vary depending on the type of cover you take out.
Business Interruption insurance
This has been in the news recently as businesses questioned if business closures over the covid period were covered.
Business Interruption Insurance applies if your business is disrupted by material damage caused by an event out of your control, like a fire or flood. Business interruption insurance provides you with the financial cover you need to get back on your feet. For example, if a flood destroyed the contents of your business premises and you need to shut your business whilst you clear up, business interruption insurance could cover the consequential loss of revenue.
Choosing your provider
As you can see, there is a lot to consider. Small businesses need many of the same types of insurance as a larger business, but it all depends on the setup of your organisation.
Those who are self-employed professional offering services will not necessarily need Employers’ Liability insurance. Should visitors do not come to your office space, then you may be able to negotiate a lower level of Public Indemnity insurance. If you are a self-employed tradesman, then you will need a different package to be compliant.
If you don’t have any employees yet, you won’t need to worry about Employers’ Liability insurance for now, but if you know you’ll be hiring some in the very near future then you might want to consider adding it onto your policy as you set it up as it may be the cheapest and easiest option.
As your business grows, you can always add different types and levels of insurance to suit your changing needs.
Your business needs, costs, and level of cover you decide upon to ensure your business is compliant will lead your choice off provider. It is not always an easy comparison as the devil is in the detail, so this is where your initial list of requirements comes in handy, so we suggest you talk to several providers and clearly compare quotes carefully.
For further business support services, why not call Claire on 01440 821991 – we are always happy to help and advice you on how to keep your business compliant.