Neil Bromage has run his own small business and is a freelance business writer working on a range of newspapers including The Times, Sunday Times, Telegraph and Financial Mail on Sunday. This book is based on a wide range of columns and Q&As written and answered by Neil for Business Link over a number of years. He is based near Preston, Lancs.
Employer’s liability is a legal requirement if you employ staff. It protects you against claims brought by employees who suffer injury at work. You are also required to display your certificate of insurance prominently in your office or place of work.
Public liability protects you against claims for injuries suffered by people visiting your premises. If you work from home a standard household insurance policy will not cover you when your home doubles up as your office. Anyone who, say, trips over a loose floorboard and breaks an arm will have the right to sue you for damages.
Professional indemnity insurance provides you with protection against actions for damages where you are alleged to have been guilty of negligence. These could be cases such as an accountant failing to file a client’s tax returns on time or an IT consultant accidentally introducing a destructive virus into a client’s computer system.
Accident and sickness insurance. If an accident or sickness means you are unable to work it’s unlikely you will be able to meet your financial obligations. These policies are designed to replace your income until you can work again. Income is limited to what you normally earn in any given period, but you can reduce costs by taking a lower one. There are ‘wait periods’ up to four months – in most policies meaning you have to be off work for that period before receiving payment.
Office insurance. Most businesses have physical assets of some sort. These may not be protected under existing insurance policies, particularly if you work from home. There are various policies available and you should investigate the market thoroughly to find the one which best suits you.
Car insurance. As soon as you use your car for work rather than simply travelling to and from it you must insure it for business use, as trips you make to see clients or co-workers are considered by insurers as being very different from ‘driving to and from work’. Failure to have appropriate insurance when you drive is a criminal offence.