Essential Business Cover
Businesses and self-employed trades people in the UK
are advised to have
Public Liability Cover but in nearly all cases
Employer's Liability Insurance is mandatory if
there are any employees. Claiming that these
employees are self employed does not necessarily
give exemption, because whether or not the law
considers them to be self employed or not depends on
the precise nature of the relationship. If materials
are provided to them or they are instructed where to
work, and when, they are likely to be considered as
employees and even if they are self employed for tax
purposes they could still be classed as employees
meaning that Employment Liability Insurance should
be in place to cover them. Depending on the trade,
Product Liability Insurance is also often times
recommended for those who deal with product sales or
distribution. These trades insurances are sensible
ways for anyone who is self-employed to lower risks
that could ultimately ruin a business. Those in the
trades business include contractors, plumbers,
grounds workers, shopfitters, carpet cleaners,
hairdressers, electricians, carpenters, surveyors
and others, seamstresses, tailors and many other
manual occupations.
Public liability protects a self-employed trades
person against any claims of injury to a third party
or damages to someone's property. Employment
liability is a legal necessity when one or more than
one employee is hired and covers liability in case
of an employee's injury, illness or death.
Although employers' liability insurance is mandatory
in most cases, public liability insurance is not.
However, although it is not considered compulsory,
most self-employed tradesmen have public liability
to ward off any claims that might arise and put
their business in jeopardy.
Public Liability Insurance standard limits are
usually £1, £2 and £5 million depending on how much
coverage is desired. Typically, a company will
purchase a policy with coverage set at £.6 million.
Most of the larger contracts or local authority
contractors will demand that coverage is set at
approximately £6.5 million.
If
a tradesman works outside of his home or frequently
works with the public, the more insurance cover the
better. For example, it is particularly important
for those in the building trades to have public
liability insurance in order to protect the business
with enough coverage in case of death or injury to a
third party or a third party's property. Many
tradesmen find that before a job starts proof of
Public Liability Insurance must be shown in order to
carry out the job and be paid. More people hiring
tradesmen are demanding that workers be covered
should anything go wrong.
There are examples of self-employed tradesmen facing
public liability charges in local newspapers every
day. The company must compensate for injuries or
losses for negligence should a customer enter a
company owned business and fall, or if a product was
improperly installed and caused injury to a user.
Whether a company is found liable or not, there are
still untold expenses incurred including lawyer fees
and time consumed addressing the case. These are
just a few examples of why public liability
insurance is important.
If
a self-employed tradesman does not have public
liability coverage, any compensation awarded on a
victim's behalf must be paid, and the courts go
after assets like vehicles, home and other property.
With the safety net of insurance, the coverage will
take care of most of the claim, which could run into
thousands upon thousands of UK pounds. Keep in mind
that Public Liability Insurance will not cover any
employees in the event they are injured. This falls
under Employer's Liability Insurance.
Compulsory insurance under employment liability
insurance became a legal requirement in 1972. There
was a time in the UK when any company, sole
proprietor or not, needed employers' liability
insurance, but this was recently changed and freed
many sole traders from the obligation. If you are
the sole owner, or directly employ close family
members (ie not under a limited company), you do not
need the insurance. However, if there is one or more
non family member staff employed, and an employer
does not have liability insurance, fines can run as
high as £2.5 thousand each day there is no coverage.
Employers' liability insurance is mandatory and
takes care of a businesses' compensation costs and
legal fees. Even if a business is no longer
operating, a former employee injured on the job can
and will often seek compensation if the injury was
due to the employer's negligence. This may also
apply to any self-employed staff or volunteers
regardless of the number of hours they work. Since
2007, the legal minimum amount of coverage required
for damages and injuries to employees suffering
illness, disease or injury during employment is £5
million. Most companies opt for £10 million or more.
Employers must have their Employment Liability
Insurance certificate on display where employers are
covered under the policy.
If a business owner has employees that work in the
UK or offshore, employment liability coverage is
necessary. If there are employees working outside of
the UK, insurance coverage may not be mandatory,
unless they work 14 days at a time in the UK or
offshore but employers are urged to check the
country's laws where the employees are stationed,
because insurance may be warranted for the
protection of your staff.
Many UK insurance companies recommend that in
addition to Public Liability and Employer's
Liability Insurance, self-employed trades people
include Product Liability Insurance as part of their
insurance package. If a company sells a product or
manufactures a product, product liability protects
the owner should a user suffer personal injury or
property damage because of a defect in the product.
If negligence is demonstrated in the way a product
has been stored, sold or checked for quality, even
if the business did not manufacture a product in
question, that business can still be charged as
responsible for the incident. That's why adding
product liability is recommended for any
self-employed trades person.
To find insurance solutions for businesses or
self-employed trades people, the best place to start
is the Internet. The UK insurance networking system
provides a user in search of public, employment and
product liability insurances the ability to research
the types of coverage available and to receive
competitive quotes from several companies
immediately. Insurance websites are available 24
hours a day and allow users to review packages and
plans, compare quotes, purchase and receive policy
copies via the Internet. Look for companies that are
registered in the UK (England) and are regulated by
the Financial Services Authority (FSA). If your
needs are complex you may need to consider a
commercial combined insurance package.
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