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Insurance
What insurance do I need when I start my business?
- If you employ staff, the law says you must have employers’ liability insurance.
- If members of the public or clients come to your premises (or you go to theirs), even if you work from home, you should consider taking out public liability insurance.
- A number of professions such as solicitors and financial advisers are required to have professional indemnity insurance.
What is employers’ liability insurance?
This insurance will cover the costs of any claims made against you if one of your employees is injured or made ill at work as a result of your negligence.
The law says:
- you must be insured for at least £5 million;
- your policy must be provided by an authorised insurer; and
- your policy certificate must be displayed where staff can easily see it.
You can be fined up to £2,500 a day if you do not have this insurance.
Always use a reputable insurer who is a member of the Association of British Insurers.
Who is exempt from employers’ liability insurance?
The law says you do not have to take out this insurance if:
- Your business is not a limited company and you are the only employee or you only employ close family members.
- If your business is a limited company with only one employee who owns 50 per cent or more of the shared capital in the business.
What is public liability insurance?
You should consider taking out this insurance if:
- members of the public or customers come to your premises (even if you work from home); or
- you go to theirs.
The insurance will cover your costs if visitors are injured on your premises because of your negligence, or if you cause injury while visiting theirs.
Always use a reputable insurer who is a member of the Association of British Insurers.
Is public liability insurance ever compulsory?
Yes – horse riding establishments must have public liability insurance.
It’s also worth noting that potential customers may require you to have this insurance before placing business with you.
What other insurance might I need to consider?
- Professional indemnity insurance – this covers you against claims for loss or damage if your business involves selling knowledge or skills. Note that professionals such as solicitors, accountants, architects, mortgage and insurance brokers, and financial advisors are required to have professional indemnity insurance.
- Product liability insurance – this would cover damage or injury caused by a product you have supplied.
- Pollution damage insurance – this would cover, for example, one-off accidents.
- Directors’ and officers’ liability insurance – this would cover claims arising from the actions of directors or officers.
Where can I get more information?
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