Do you need insurance for your limited company? As a business owner, it’s vital that you protect both yourself and your firm with the correct and best insurance.
Valid cover is needed as part of the contracts that are agreed with clients or agencies. As the director of your company, you need to ensure that the insurance you have meets the contractual requirements of individual projects.
With many types of policies available, it can be overwhelming trying to choose the right one. Here are some of the most important insurance types you should know about, and why:
Employers’ Liability Insurance
This type of cover is a legal requirement if you’re planning on employing people.
As an employer, you are responsible for the health and safety of your employees whilst they’re at work. In the unfortunate event of an injury or accident in the workplace, a claim might be made against your company.
Employers’ liability insurance is designed to protect your employees by providing compensation if they ever suffer from an illness or injury that relates to your company. It acts as a safeguard for your business against compensation and legal expenses from claims – without it, your company could be held liable.
Product Liability Insurance
This insurance covers the compensation costs of employees who may become injured by faulty products that your company supplies, manufactures or designs.
If your company makes a piece of machinery that fails or malfunctions, product liability cover will financially protect you from the claims that may arise as a result of the incident.
Public Liability Insurance
Public liability insurance covers your company against claims that are made by members of the public for accidental damage to property or injury due to your business activities. The most common forms of claims made in this instance are slips, trips, and falls.
If your company deals with the public directly, this insurance type is invaluable. From clients visiting your office to yourself and employees visiting a client’s site, having public liability insurance is a must for your business’ protection.
Professional Indemnity Insurance
This policy covers compensation costs and protects you and your business against claims for damage or loss made by clients and third parties as a result of advice or services you provided. Compensation claims can be made against your business even if the service or advice you offered was free.
Professional indemnity insurance only covers you for claims that are made against you during the period of your policy. If a client or third party makes a claim against you for work completed before your policy started, then you won’t be covered. In addition, if your insurance expires you will not be covered for any incident that occurred while your policy was still active.
Professional indemnity insurance can be bought through the British Insurance Brokers’ Association (BIBA) or directly from an insurer. The price and amount of cover you need will all depend on your occupation. Some professions require you to have this insurance type, including:
- Accountants
- Architects
- Chartered surveyors
- Financial advisors
- Solicitors
Legal Expenses and Tax Investigation Insurance
This insurance covers the legal expenses of your company. From employment disputes to tax investigations, the services this insurance provides covers a broad range of other legal costs.
Small business owners, contractors and freelancers can benefit greatly from this insurance type. There are many instances where you may accumulate such costs, including if HMRC approaches you for a tax investigation. You never know if you will be called upon, as each year any one out of 1,000 tax returns is randomly selected for scrutiny.
Other expenses this policy covers include:
- Compliance and regulation
- Contractual disputes
- Damage to property
- Debt recovery
- Identity theft
- Unpaid invoices
Directors’ and Officers’ Insurance
This insurance for a limited company is targeted at those who act in the capacity of an officer, director, or decision-maker of a business and it offers financial protection. It covers awards made by the court against an insured individual for actions or decisions taken within the realm of their day-to-day duties.
Directors’ and officers’ insurance also covers employee discrimination claims. For example, harassment, unfair dismissal, or the failure to promote an employee. Depending on your insurer, it can also cover defence costs that arise from regulatory and criminal investigations into your business where no wrongful act has been reported against an executive.
Choose the right insurance for your limited company
Protecting yourself and your business with the right kind of insurance for your limited company is essential. From safeguarding your finances to establishing yourself as a trusted and reputable firm, having these policies in place will ensure that your business is fully covered in the event of any type of incident.
If you have any questions about insurance for your limited company, or any aspect of running a business Massive Startup is here for you. As part of our Business Starter Packs we offer a mentoring service. Our friendly, experienced mentors are here to answer any questions you have.
Find out more about our Business Starter Packs, or email us today: start@massivestartup.co.uk
