Guest blog by Les Hiftle (Commercial Account Executive, Northern Counties LLP).
Whether you’re a tradesman working from home, renting premises or thinking of starting a larger company employing staff, then you will need to protect your assets and liabilities to give you peace of mind and ensure that should the worst happen, your business will continue to trade with minimum disruption.
An insurance professional/broker can help you decide what cover best suits your needs but here’s a brief overview of some of the main types of business insurance you may wish to take out.
Any small business is vulnerable to a claim of negligence when professional advice or services fail to meet a client’s expectations and cause financial loss. This policy offers cover for compensation you may need to pay to correct a mistake or cover any legal costs due to negligence, such as giving incorrect advice.
You may need to consider this cover if you:
- Provide advice to your clients
- Handle data belonging to a client or business
- Are responsible for a client’s intellectual property
- Provide a professional service and could be challenged on your work.
Employers Liability Insurance
If you employ members of staff in the UK you are required by law to hold Employers Liability insurance under the Employers Liability (Compulsory Insurance) Act of 1969. This states that employers must insure against liability for injury or disease to their employees arising out of their employment. This cover must provide at least £5m indemnity (usually £10m) and a certificate will be issued by the insurer confirming that cover is in place. This certificate must be displayed at the business where all staff can access it.
The PAYE Employer Reference Number (ERN) must be supplied to the insurers to populate the Employers Liability Tracing Office (ELTO) database. This number can be found on payslips and mandatory documents such as P45, P60 and P11d and is used to assist any claimants who may suffer from accident or disease in the workplace, to trace the employers liability insurer.
Sole traders without employees will not require this cover.
As an employer, you are responsible for the Health and Safety of your staff. If you have five or more employees, you will need to have a Health and Safety policy in place in accordance with the requirements of the Act, ensuring you have the minimum level of cover in place should an employee try to claim compensation if an injury occurs in the workplace.
Without this cover you would not only be breaking the law, but any claim directed against you could possibly put you out of business.
Public Liability Insurance
This provides cover against claims made by members of the public who may suffer from injury or property damage in connection with the business. For example, a member of the public suffers injury on your premises as a result of tripping over an electrical cable or piece of loose carpet.
It is possible to minimise such risks of course, by making sure that any hazards are clearly marked, no risks of tripping or slipping, and ensuring that staff are made aware of such potential risks.
However, accidents do happen and that is why it is essential to have such cover in place.
This cover is designed to provide compensation and possible damages awarded to a claimant if you are found to be legally at fault for the accident.
Public Liability also provides cover for incidents which may occur whilst visiting a customer’s premises. Your clients or customers will usually require you to have Public Liability cover in place before agreeing to work with you or undertake contract work on their behalf.
Various indemnity limits are available usually £1m £2m or £5m. Higher limits may be required for work in hazardous areas or for companies conducting high risk business. In this case an Excess of Loss policy can be sourced.
This protects against injury to customers or damage to their property caused by a product you have sold or supplied. This cover usually runs in tandem with Public Liability.
Property Owners Liability
If you own premises this covers you against injury or damage suffered by visitors to it, for example tripping over a loose paving stone for which you are responsible.
Should your business suffer from material damage such as a fire or flood, the disruption may affect the ability of your business to continue normally. This cover provides for any loss of profits or revenue while the business is unable to trade.
You will no doubt have invested money in business tools and equipment, computers, buildings and the like. These are essential to the running of the business and any loss can have a devastating effect unless appropriate cover is given.
Les Hiftle was born and bred in Newcastle upon Tyne and has over 30 years experience in both the Personal Lines and Commercial Insurance Industry. He began employment (in black and white) at RAC in Jesmond and moved to Gordon Keddie Insurance Ltd as a Commercial Insurance Handler until the company was absorbed by Northern Counties Insurance in 2004.