Insurance you must have
Your business is at risk of potential claims and liability costs if you do not take out adequate insurance. There are some types of insurance you are required to have by law. This guide will outline what they are.
- Employer's Liability Compulsory Insurance
- Third party motor insurance
- Professional Indemnity Insurance
1) Employer's Liability Compulsory Insurance
Most businesses have to have this insurance. It will protect you against claims from your employees for any accidents they have or sickness they suffer as a result of working for your business. They might try to claim compensation from you if they think you are responsible. The insurance mean you have at least a minimum level of insurance cover against any such claims either on or off site. By law your insurance must cover at least £5m but most policies offer £10m. The policy should cover all staff including people on work placements.
You may not need this insurance if you have no employees or are a family business.
- Find out more on the Health and Safety Executive website
- Assess whether you are exempt or not
2) Third Party Motor Insurance
Your business is required to have this insurance if it uses motor vehicles. If someone is injured or their property is damaged as the result of a collision caused by you or one of your employees this insurance will cover the cost of a claim. Your insurance, by law, must cover at least £1m for property damage and an unlimited amount for personal injury. You should also think about buying comprehensive insurance to cover damage or theft of your own vehicles. Additionally think of employees who use their own vehicles in their job. You should ensure that insurance for all these vehicles have been extended to include business use.
- If your business uses motor vehicles you have to have this insurance
- Assess exactly where motor vehicles are used in your business and by whom
3) Professional Indemnity Insurance
Businesses in some professions such as law, accountancy, the financial sector, architecture and surveying may be required to have this insurance by their industry regulator. It covers the cost of compensation to your customers or clients if your professional advice has led to them to lose money. It also covers you if your business has made mistakes or has found to have been negligent in some or all of the services that you provide for your customers. The insurance also covers legal costs. Remember that you need to be covered both at the time of your error and when the claim is made. This is because there can be delays between the two events.
- Find out if this is an insurance that you need
- Ensure you are covered at all times
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