Running a limited company is a hugely rewarding career for many reasons however, it is always important to be aware of the risks involved which is why we offer contractor accounting services and all types of business accounting services. This blog post outlines the various different types of insurances that are available to help protect these businesses.
Employers’ Liability Insurance
This insurance is only necessary for businesses with employees. Therefore, if you are a sole trader and do not employ anyone, this insurance would not apply to you. Also if you are a limited company and the only employees are the owner/directors this insurance is not a legal requirement. If however, you do have employees, even if only part-time, you will need employers’ liability cover. Not having the cover is a criminal offence, you could incur a fine of up to £2,500 per day. Many organisations however, only work with companies that have this cover.
Public Liability Insurance
If your business has contact with members of the public, it may be necessary to take out Public Liability Insurance. This would cover you for damages claimed or legal representation. While this insurance is not a legal requirement, many organisations only work with companies that have this cover.
Professional Indemnity Insurance
Professional Indemnity cover protects you against claims of negligence, making an error or omission, or giving bad advice. It also covers lost data or documents.
Even if you have not been negligent, defending yourself after an accusation can be costly. This insurance will cover you for legal defence costs and also damages awarded against you.
Occupational Personal Accident Cover
If you were to get injured at work and needed time to recover, you would consequently make a financial loss. This insurance pays you a benefit while you recover to help you cover your mortgage and living expenses etc.
Directors’ and Officers’ Liability
This insurance would cover you if your business is accused of financial mismanagement, health and safety issues, legal breaches etc. It protects you from any legal fees that may amount from any claims. As the company director, you could be held responsible for any number of claims of this nature, so protecting yourself with insurance is crucial.
Legal Expenses Insurance
Costs can mount up when your limited company is defending a commercial dispute. Similarly to the Directors’ and Officers’ Liability insurance, the Legal Expenses insurance covers the costs incurred by pursuing a dispute.
Relevant life policies
Relevant life policies are only relevant for non sole traders as it is an insurance plan available to employers to provide a ‘death in service’ benefit to an employee. This is extremely tax efficient as the company can pay the policy, making it not taxable on the individual.
There are a limited number of insurance providers that offer cost-effective and comprehensive limited company contractor accounting services. We are always more than happy to discuss insurance and offer advice to our clients.
Companies House also offer more information about business insurance here.
If you would like to discuss the contents of this blog further, please feel free to contact us.