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Self-employment: what is business insurance and do I need it?
If you run your own company, business insurance is essential and you may be breaking the law if you don’t have cover in place. Business insurance will pay out if you suffer a financial loss whilst carrying out certain types of business activities and it reduces uncertainty for your business should something go wrong.
The types of things business insurance covers include:
- Professional indemnity
- Tools and machinery
- Public liability
- Property damage
- Employment disputes
- Legal expenses
What are the different types of business insurance?
There are different policies designed for self-employed professionals and large companies where more comprehensive cover may be required. To protect your liability as a business, there are four different types of policies available, these are:
- Legal expenses – This covers fees for court proceedings or tax disputes with HMRC.
- Employer’s liability – This covers compensation pay-outs to employees as a result of injury or death as a result of working for you.
- Public and product liability – This covers a third party or their property if they are injured or property is damaged because of your business activities
- Professional indemnity – This covers a client suing you for damages as a result of your professional advice. This is beneficial if you are, say, a solicitor or accountant.
To protect your commercial premises and its contents, there are three different insurance products available including:
- Business interruption – This covers financial losses suffered as a result of not being able to trade such as property damage.
- Goods in transit – This covers loss, damage and theft of business property while it is in transit.
- Commercial property cover – This covers damage to your building, contents and any stock your business owns.
You can also combine a number of different policies to create the business insurance which would be the most beneficial for you.
How much is business insurance?
Business insurance is dependent on a number of factors including type of business, annual turnover, level of cover you need, size of premises and how many employees you have.
Why should I get it?
As a business owner, you have a legal obligation to have certain types of business insurance by law, such as employer’s liability insurance if you employ staff. Also, some professions such as financial advisers and insurers, are required to have professional indemnity insurance.
Other types of business insurance, including policies that cover property, are optional and it is dependent on your circumstances whether you feel like you should purchase one of these or not.
How can I make a claim?
If you need to claim on your business insurance, you should contact your insurer or broker as quickly as possible and provide them with as much information as you can. Most insurers have a 24 hour helpline so you can get in touch any time to discuss any issues that are affecting your business.
For certain types of claims, your insurer may come out to visit you, or your premises, to discuss things in more detail or survey any damages.
To find out more about business insurance, get in touch with a business insurer, independent financial adviser (IFA) or business adviser as soon as possible.