Employers’ liability insurance (ELI) is a must for many businesses, but are you one of them?

We look at everything you need to know about employers’ liability insurance.

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

What is employers’ liability insurance?

Employers’ liability insurance covers you if your employees or ex-employees develop a work-related illness or get injured on the job and they make a claim against you.

What does it cover?

It covers legal costs, medical costs, lost income and possible court-ordered compensation.

Is employers’ liability insurance compulsory in the UK?

The latest version of the Employers’ Liability (Compulsory Insurance) Act 1969 states that: 

• Businesses, groups and individuals that employ staff must hold a minimum of £5m in employers’ liability insurance 
• This must be from an authorised insurer that is registered with the Financial Conduct Authority (FCA) 
• The Employers’ Liability Certificate must be on display to show employees that you hold this cover 

This includes staff working from home – though they’re working from a different location, it’s still your responsibility to make sure they’re protected from injury. If possible, you should carry out a risk assessment of your employees’ home spaces to check if they’re suitable. This could include checks of the workstation itself, lighting, flooring, data security and electrical installations. If you can’t check the spaces, you should provide information on how to work from home safely. Contact your insurance provider if you’re unsure who or what is covered as well as what actions you’ll need to stay in line with the Ts and Cs.

The Health and Safety (Display Screen Equipment) Regulations 1992 applies to users who habitually use screens for work. Make sure your employees have regular breaks and eyesight tests, and provide adjustable furniture as well as health and safety information.

However, employees also have a ‘reasonable duty of care’ over their own health and safety at work. They should keep you as the employer in the know as to any changing health and safety risks along with any changes that are needed for their working wellbeing.

What happens if you don’t have ELI? “The most common mistake would not be getting the cover when it is legally required. This would usually result in prosecution if a claim was made against them,” said Jordan Gregg, group underwriting director at Cedar Underwriting.

Worrying figures show that 44 per cent of SMEs are skimping on insurance in order to save money during the cost-of-living crisis, say money.co.uk. A substantial 40 per cent are underinsured, meaning that they don’t have enough insurance to cover the needs of their business.

Further research shows that over 160,000 small businesses in the UK, with between one and nine employees, will not have employers’ liability insurance by the end of 2023, according to research from Smart Money People. 

This could lead to serious consequences in future. “Even if a claim wasn’t made, the client may find it difficult to get insurance coverage again as they would be required to disclose this fact to future insurers,” said Gregg. “Insurance companies would see this as a red flag of poor risk management and lack of understanding of the client’s obligations. All businesses are considered ‘sophisticated buyers’ and therefore should be aware of their obligations.” 

Businesses breaking law over employers liability insurance – Nearly a million small businesses are unwittingly breaking the law by not having compulsory employers’ liability insurance cover in place – and penalties are severe

You might even secure it as part of an insurance deal, without even realising. “Some small ‘package’ type policies would just include EL as standard,” said Gregg. “A package policy is where a series of covers are ‘packaged’ together rather than picking and choosing what is required.” 

Oh, and ELI is required by law if you have more than one director.

How do I get employers’ liability insurance?

Buy insurance as you would buy many other financial products – through insurers or through intermediary services such as brokers or trade associations. It may also come as part of an insurance package as Gregg mentioned. Whichever way you get it, do shop around and compare quotes.

“[Comparison sites] all have different filters so that you can get the right product for you. Depending on the size of your business, how many employees you have – all sorts depending on what you’re looking for and then you can [go] bespoke that with the providers directly once you get your quote,” said Jamie Day, associate at Slater & Gordon. “It’s quite good at being able to disseminate what your business needs.”

Check the register on the FCA website just to be sure that your insurer is legitimate. By using an unauthorised insurer, you could be breaking the law. The Financial Conduct Authority keeps a register of authorised insurers, which is available on its website www.fca.org.uk/firms/financial-services-register.

How much on average does employers’ liability cost in the UK?

According to NimbleFins, ELI costs in the region of £61-£600 a year per employee, depending on how risky the work they undertake is. Its own figures show that two lower risk workers costs £232, two moderate risk workers costs £289 and two higher-risk workers costs £541.

“Retail workers for example would attract a lower premium as the exposure to death, injury or illness is minimal, much like clerical workers. Those working in manufacturing processes with heavy machinery are at a higher risk of injury,” said Gregg. “The most expensive premiums tend to be those that work at height and/or where heat is involved. For example, roofers and scaffolders attract expensive premiums due to the dangerous work and potential injury should something go wrong.” 

Location can also play a role here. Areas where more ELI claims are made are likely to attract higher premiums. Let’s not forget the size of your company too.

How can I reduce the amount I pay on premiums?

Start speaking to your broker early and have all of the relevant risk-based documentation to hand. Having good training protocols in place to reduce the risk of further accidents is key, as is an accident log with previous incidents for full transparency. The Health and Safety Executive’s (HSE) full risk assessment service can help you along here.

All in all, premiums are affected by how safe you’re deemed to be. “Companies can reduce their premiums by demonstrating excellent attitudes towards risk management,” said Gregg. “By having full health and safety procedures and regular training, for example, the risk of a claim would be reduced in the opinion of most underwriters.” 

How to reduce employers’ liability insurance – Employers’ liability insurance premiums are currently rising at around 4 per cent a year. Here are some tips as to how to keep those EL insurance premiums down

Is it a legal requirement to display employers’ liability insurance? 

Yes, you’ll need to display it where employees can see it – say, in the staffroom, at the workplace’s entrance or in the kitchen area. If an inspector comes along and requests to see it, you’ll need to hand it over or you’ll be fined.

This can also be digitally. “There was an amendment to the regulations in 2008 that allows digital display, but again, the employer has a duty to explain to their employees where to access it and make sure they are able to access it to avoid that fine,” said Day. “You might even have it in your employee handbook, for example. When people start their new job and you say, ‘If you need these policies and procedures, you can see under page X on our intranet.’ You just need to make sure that staff have that information to make sure obligations are met.”

Do I need ELI for subcontractors? 

Rules are especially murky for subcontractors and freelancers. The level of control you have is the defining factor. 

Judith Rutherford, former director of the London Skills and Employment Board, said you will need ELI for someone who works for you, if:

• You deduct national insurance and income tax from the money you pay them
• You have the right to control where and when they work and how they do it
• You supply most of the materials and equipment
• You have a right to any profit your staff make and you will be responsible for any losses
• You require that person only to deliver the service and they cannot employ a substitute if they are unable to deliver it
• They are treated in the same way and work under the same conditions as your other staff

However, you will probably not need employers’ liability insurance for someone who works for you, if:

• They do not work exclusively for you, such as in the case of an independent self-employed contractor
• They supply most of the materials and equipment they need to do the job
• They are in business for personal benefit
• They can employ a substitute if they are unable to do the job themselves
• You do not deduct national insurance or income tax (but remember they may still be classed as an employee based on other indicators)

>See also: Employers’ Liability Insurance explained – Judith Rutherford gives a summary of which businesses need to get employers’ liability insurance and why they should be getting it

You will need employers’ liability insurance for subcontractors that are ‘labour-only’ as you’ll be providing tools and uniform. A ‘bona fide’ subcontractor, on the other hand, is one who can work without direction, holds their own insurance and they’ll usually provide their own materials and tools.

“The issue comes from the fact that employment status is very rarely black and white,” said Gareth Matthews, partner at MLP Law. “Small businesses might use what they term ‘freelancers’, but they might be exerting more control over them than they think. By doing that, they’re increasing the likelihood that they’re not genuinely self-employed.”

He referenced recent cases around employment status, including Uber and Deliveroo. “With a lot of freelance arrangements, those people are coming into the office X number of days a week, using the company’s equipment and networks and are under direct control, like an employee would be. [In this situation] I’d have to work when I’m told I have to. If I want a holiday, I’d have to book it.

“With a freelancer, you shouldn’t really have that. But actually, you’ll find that lots of businesses will do that. What they’re doing is the blurring the lines.”

As mentioned, where individuals work can be important too – if they work remotely then you don’t need insurance if they’re using their own equipment. If you tell them to come and work on-site and use your equipment, then you do. Be careful about this. If they become unwell from ill-positioned equipment, for example, they could make a claim against you. 

“If a freelancer had an accident, and they tried to claim under it, we look at that control test. If there’s enough control, they’ll probably be able to claim under that even if the business is set up with freelancers,” said Matthews. “Usually, you’d find that the court is likely to sympathise with the individual.”

If you are in any doubt, contact the Health and Safety Executive (HSE).

Do you need employers’ liability insurance for self-employed staff? – In most instances, you’ll need employers’ liability insurance for your business. But what if you hire someone who is self-employed?

Do I need employers’ liability insurance as a sole trader? 

If you work completely on your own, you won’t need employers’ liability insurance. If you do have one or more employees and you have significant control over what they do and where they’re based, then you’ll need ELI.

Do you need ELI for volunteers?

Yes. Treat them like you would employees in this case – of course, this also applies to interns, freelancers and people on work experience, even if they’re not paid.  

You might be wondering if there’s any flexibility on ELI if you only hire seasonal workers and/or interns. “Yes, the EL could be added and removed as and when required on most policies. This would often incur an admin fee though so it’s sometimes more economical to leave it on,” said Gregg.

“The reality is that these premiums aren’t that expensive,” added Day. “If you’re a small business with a couple of employees, it can be under £50 for employers’ liability insurance.”

Which businesses are exempt?

Exemptions apply to businesses with no employees, businesses with overseas employees and businesses that employ close family members. 

What might employees try and claim for?

We’re sure you could guess what kind of claims this insurance covers. Just for reference, here are some examples:

• Falls from a height
• Tripping over a wire
• Accidents due to a lack of training
• Injuries caused by other employees
• Repetitive strain injury
• Asbestos and other long-term industrial claims e.g. occupational asthma or noise-induced hearing loss
• Failure to provide adequate safety equipment

Day uses the example of a food business that accidentally causes a customer to go into anaphylactic shock with a dish it serves. “If your staff are involved in that process, they can be liable, which comes back on you as the employer.”

As mentioned, inadequate training can come back to bite you. “If employees hurt themselves and their health and safety training hasn’t been done, whether that be manual handling or basic health and safety and risk assessments of the premises in general. It’s quite wide reaching, really.”

What is employment practices liability insurance?

Employment practices liability insurance can protect you against litigation when an employee claims for some form of violation – this includes workplace harassment, discrimination and wrongful termination. It potentially covers the claimant’s costs and legal representation for employment investigations. The cost of back-paying wages will be from the dismissal date to judgment date if you’re ordered to reinstate the employee.

A note on workers compensation insurance

You might have come across workers compensation insurance, but it’s a type of insurance that’s available to workers in the USA. Say that an employee gets ill or injured and has to take time off work or are unable to return to work. If it happened during working hours, they may be due some compensation. They could claim for lost earnings and other expenses that the illness brought about, along with medical fees and legal costs.

More on business insurance

How to claim on business interruption insurance post-pandemic – Steven Skiba explains how Covid-19 shook up the world of business interruption insurance and what you need to know about making a claim

Employers’ liability insurance – don’t get caught out! Whatever the line of work, all small businesses will carry an element of risk which could affect its staff

What insurance do I need for my beautician business? We help you to scope out what insurance you need as a beautician as well as the need-to-know extras and restrictions

The post Employers’ liability insurance – what is it and do you need it?  appeared first on Small Business UK.

Three years on from the height of the Covid-19 pandemic, the world of business interruption insurance has changed radically.

In 2020, policy confusion reigned, with small businesses uncertain of what exactly was covered by policy and therefore what could be claimed. With no clear answers and uncertainty for both insurers and businesses, the Financial Conduct Authority (FCA) stepped in with a test case, designed to test policy wording first at the High Court, and then, following a successful appeal to clarify wording further, at the Supreme Court in 2021.

>See also: Small firms win pay-outs in Covid business interruption insurance ruling – A Supreme Court ruling states that small businesses should get pay-outs on their Covid-19 business interruption insurance claims

The test case looked at a number of policies across a wide range of sectors, and its success at both the High Court and the Supreme Court gave clarity to thousands of small businesses and ensured that they received cover where previously it may not have been possible.

For example, wording was unclear regarding what amounted to a disease, and what peril would therefore trigger the clause. There was also a decision to clarify prevention of access clauses, as well as hybrid clauses which linked disease and access prevention. In the case of the former, the Supreme Court decided that businesses no longer had to receive a direct order preventing access to the premises from the local authority or central government. It also clarified that an insurance claim could still be made if only partial access be restricted, rather than no access to the premises as a whole, and/or if only a part of the business was affected rather than all of the business.

As a result of both the High Court and the Supreme Court decisions, policyholders are in an advantageous position when claiming for business interruption insurance. The FCA has taken a keen interest in ensuring that insurers abide by the decisions and have provided guidance and expectations in areas such as the speed of processing claims. This means that small businesses may find their claims are processed at a quicker rate than previously predicted, or, if there is a longer process to undertake, they may find the insurer will make an interim payment; both of which will be beneficial as the cost of doing business crisis continues.

The decisions by the High Court and the Supreme Court mean that businesses are more supported than ever when it comes to making insurance claims for business interruption arising from the Covid-19 pandemic, with payouts arriving faster than before. However, to ensure a claim is successful, there are still things that a business needs to do to prepare.

Making a claim on your business interruption insurance

The most important thing is to collate all data and documentation relating to a claim early, so that it is easily accessible and in one place, and to seek professional advice where appropriate. Gathering financial information such as proof of revenue loss, for example, is vital, and a professional advisor will be able to provide guidance as to what is relevant and what may not be.

It is also important for a business to follow the claim procedures that are mandated in the insurance policy to the letter, as this can affect the progress of a claim and may be prejudicial to it. Ensuring that all timescales, formatting and other rules are adhered to will give a business the best chance of making a successful claim that won’t be denied on a technical error such as non-cooperation.

Should a business interruption insurance claim be unsuccessful, there are still methods to recoup losses. For example, a business could look to the Financial Ombudsman Service (FOS) to make a complaint and begin an investigation. Whilst this process is free, accessible and can be initiated after the final decision by the insurer has been made, it is important to note that the FOS can uphold the insurer’s decision, and it is not a guaranteed path to success.

Another route would be to seek professional assistance and litigate, bringing a claim through the courts. Whilst this has many advantages in that the business will be supported by a legal professional, it is important to consider the cost implications of this action.

A final way to recoup losses could be to examine the service of the broker and seek to understand if the business has been ill-advised surrounding the insurance policy and expected cover. If this is the case, a professional negligence claim may allow a business to recover at least some of its losses.

While the decision of the courts has proved advantageous to small businesses, they should be aware that insurers are likely to be looking at future policy wording should another pandemic event arise. Therefore, it is always important to read through new insurance policies carefully and to check with the broker that the cover offered meets the needs of the business to ensure that the business knows exactly what will qualify for a claim.

With the High Court, Supreme Court and FCA onside, small businesses are currently in a positive position when it comes to making successful business interruption insurance claims. By ensuring that all policies are clearly understood, accurate records are maintained and evidence is easily accessed should the need for a claim arise, small businesses will maximise their chances of success.

Steven Skiba is legal director and dispute resolution expert at law firm, Shakespeare Martineau

Further reading

Business insurance: 10 common questions answered – Without the right business insurance, your company could find itself in financial hot water

What business insurance do I need as a sole trader? – What are the main types of business insurance for a sole trader and what if I’m working from home?

Do I need retail insurance for my small business? – In this guide, we delve into what retail insurance is, what you need by law and what kind of restrictions you should be clued-up on

The post How to claim on business interruption insurance post-pandemic appeared first on Small Business UK.

More than half a million people sustained an injury at work in 2022, according to the Labour Force Survey, costing the economy nearly £8bn. Nearly another million people suffered work-related stress, depression, and anxiety.

Employers are legally required to have insurance to pay out on their legal liability if one of their employees is injured or becomes ill as a result of being at work. It’s compulsory.

Yet, according to Premium Credit, 26 per cent of small businesses have stopped buying compulsory employers’ liability insurance altogether – possibly put off by those rising premiums.

Businesses breaking law over employers liability insurance – Nearly a million small businesses are unwittingly breaking the law by not having compulsory employers’ liability insurance cover in place – and penalties are severe

How much employers’ liability insurance do you need?

The legal requirement for cover is £5 million but most insurers offer up to £10 million. Compensation claims for staff are often very high, which is why insurance is compulsory.

Alastair Blundell, head of general insurance at the British Insurance Brokers’ Association (BIBA), says: “Having £10 million worth of cover is important for safeguarding against catastrophic losses.”

Especially when there has been a trend for courts to award larger amounts in workplace-accident settlements.

How much could you be fined?

You could be fined up to £2,500 for each day you do not have employer’s liability insurance in place. Plus, if you’re not prominently displaying your certificate of employers’ insurance in your workplace, you could be fined a further £1,000.

How fast are employers’ liability insurance premiums rising?

During the pandemic, the number of employers’ liability claims actually came down – obviously due to workers being stuck at home – which should have flowed through to being able to hold EL premiums at lower levels.

Over the past year, increases in EL premiums have stayed at around 4 per cent, but premiums are not going to be coming down anytime soon.

Says Blundell: “The good news is that the underlying trend has been for the volume of EL claims to be lower, partly due to our living in a safer society, which may filter through to how risks are priced.”

So, rather than reducing your EL cover to reduce your premiums, right now it’s about keeping your protection at the right level to ensure you are properly protected.

Public liability insurance: why you need it – Not sure if you need public liability insurance for your business? Sam Humphrey from Insure Our Event explains what you need to know

Below are seven ways to reduce your employers’ liability insurance.

How to reduce your employers’ liability insurance

The earlier you start talking to a broker, the better. Keep a record of your full underwriting history so far to hand, if applicable, as the more information you can give your insurer about potential risks, the better off you will be. If there were any risks noted, consider whether these could have been improved and how.

You should also consider what could go wrong, identify who could be affected and how, decide what you would do to address the situation, record your findings, and regularly review this assessment. The Health & Safety Executive (HSE) offers a free online risk assessment service, to help illustrate the potential costs of a workplace accident.

7 ways to reduce your employers’ liability insurance

#1 – Have evidence that you are a good risk

Show that you have systems and controls and the governance in place, and that you have a robust health and safety policy that is backed up with a thorough set of current risk assessments. You need to show that you take health and safety seriously. In turn, your insurance broker can articulate this to the insurer.

#2 – Good training protocols

For example, that people who operate dangerous machinery in your workplace have the right PPE and wearables fit for the job. Keep up to date records of what training has been done. Well trained employees are less likely to be injured at work.

#3 – Keep an accident log with positive outcomes

Demonstrate what you have done to address issues that have come up after previous workplace incidents to prevent them from happening in the future.

#4 – Document your health and safety training

That way, you can demonstrate what you have done by way of training and that you have been looking after your staff if a claim is made.

#5 – Be detailed when you apply for EL cover

EL premiums are calculated using a percentage rate on your wage roll. The risk profile of your deskbound accounts department is going to be different from somebody working on your factory floor driving a forklift truck.  So it is a good idea split our your wage roll by the key areas of your operations. In this way, the premium will be more accurate.

#6 – Try to buy a packaged policy

A packaged insurance policy could bundle your building insurance, business interruption cover, and public liability insurance alongside EL cover, which, if bought together, can be better value because it offers economies of scale and the cost benefit of buying packaged up.

#7 – Use an insurance broker

Yes, you may be able to find the cheapest insurance going direct to a price-comparison site, but you could be inadequately covered. It’s not just about price but who the insurer is, whether there are gaps in the cover, and what are the service levels of your insurer and their reputation when it comes to servicing claims? Certain insurers specialise in specific business sectors, whether that’s printing or waste management.

A broker will often be the first port of call when you make a claim and they will then interact with the insurer on your behalf, which is a key service.

Employers’ liability insurance and homeworking

One thing that has changed since the pandemic is the rise of hybrid working, with most office staff just commuting two or three days a week into the office. However, you as an employer still have a responsibility to ensure that your member of staff’s home setup is stable and not, say, likely to cause a long-term back or neck injury.

More on employers’ liability insurance

Employers’ liability insurance – what is it and do you need it? Here, we answer all of your questions around employers’ liability insurance – how much will you pay and what happens if you don’t have it?

The post How to reduce employers’ liability insurance appeared first on Small Business UK.

For some, the importance of business insurance is overlooked because they’re unaware of the extent of protection it provides. For others, the complicated jargon and numerous options leave them too overwhelmed to make a decision.

But, no matter which camp you fall into, putting your reservations to the side and learning more about business insurance is the best way to safeguard your company.

1. Why do I need to insure my business?

Quite simply, in some circumstances, operating without business insurance is illegal. But you shouldn’t buy insurance just because it’s a legal requirement, there are other forms of corporate insurance that your business could really benefit from.

Without purchasing additional insurance to protect your business, a claim arising from an accident – either at the premises or otherwise due to your company – could leave you with a large compensation claim.

2. What types of business insurance are legally compulsory?

If your company has staff, it is legally required to hold employers’ liability insurance. This is the case if you have any employees other than yourself, even if they’re unpaid volunteers or student interns.

Employers’ liability insurance covers any compensation costs in the instance that one of your employees becomes ill or is injured as a direct result of their work. For example, if one of your employees falls on your business premises due to uneven or broken flooring and breaks a bone, you’ll be covered financially.

If your business operates any motor vehicles, you’ll also need at least third-party motor insurance.

> See also: Employers’ liability insurance – don’t get caught out

3. Are there any other kinds of business insurance I would need?

Not all business insurance policies are legal requirements, but that’s not to say they’re not necessary to safeguard your company.

Spending money on protecting your business against events that might never happen can sometimes feel frustrating and potentially unnecessary, but if the worst should happen, it could be the difference between sinking or swimming.

Some policies you might want to consider purchasing include:

• Public liability insurance: Cover for injury and damage claims made against your business by a third party
• Professional indemnity insurance: Cover against claims for loss or damage made by third parties as a result of negligent services/advice provided by your company
• Business interruption insurance: Cover for loss of income during periods your business cannot operate due to an unexpected event
• Property damage insurance: Cover for the cost of repairing any accidental damage to the structure of your property
• Warehouse insurance: Cover for the cost of replacing stock or equipment stored in your warehouse in the instance it is accidentally damaged

4. What is public liability insurance?

If you or an employee of your company damages third-party property or injures a non-staff member, public liability insurance helps you cover the cost of a compensation payout. For example, if a visitor trips over while on your business premises and incurs a serious injury, they might file a claim against you. Public liability insurance is intended to help you fund compensation for members of the public rather than your staff. If you have a good amount of business savings, you might be wondering why public liability insurance is so necessary, and that’s probably because you’re underestimating the cost of a compensation claim. Even mild injuries could see you asked to pay upwards of £10,000, with some more severe injuries invoking payouts of £50,000+. And, for most small business owners, this isn’t the kind of cash you just have lying around.

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

5. What is professional indemnity insurance?

Professional indemnity insurance is intended for businesses that provide professional services or give advice.

If you make a blunder or give poor advice, resulting in a client losing money, that client – or an associated third party – could bring a successful lawsuit against you. Losing this lawsuit would require compensation which professional indemnity insurance could help you pay for.

An example of a business that could benefit from professional indemnity insurance is an architectural company that draws up building plans. If a building is built based on a flawed architectural design and needs to be torn down or drastically altered, professional indemnity insurance could save an architectural company thousands of pounds.

6. How should I insure the business premises?

Given how much your business could rely on its premises, it would be wise for you to ensure the premises either via property damage insurance or warehouse insurance.

While every business owner with premises or a warehouse could likely benefit from these policies, if you deem your firm at risk of theft, fire or flooding, getting cover for these risks is extra useful.

This insurance can be sourced cost-effectively when packaged with other business insurances in a commercial combined insurance policy.

> See also: What is commercial combined insurance?

7. What is business interruption insurance?

Unfortunately, sometimes unexpected events such as fires, floods or storms result in the temporary inability to operate your company or use your business premises. Business interruption insurance will help you put your business back in the position it was in before the catastrophic event by providing financial compensation to cover damaged property or equipment.

The inability to run your business due to an infectious disease (like COVID-19) is also sometimes covered by business interruption insurance. However, you should always check your policy wording to know exactly what you’re protected against.

8. How should I start looking for business insurance?

Here’s the part many people struggle with: “Where do I start?”

There are so many providers and so many different types of insurance that the idea of having multiple policies taken out from a variety of providers likely feels confusing.

So, if you’re finding it hard to figure out which insurance policies suit your needs considering a combined commercial insurance policy might be the way to go. Combined commercial insurance takes the weight off your shoulders as it allows you to purchase several coverage types under one policy, meaning everything you need is in one place and paid for under one simple policy.

If you’re interested in combined commercial insurance, get a free quote for our policy today.

With our policy, you’ll not only get the peace of mind that your insurance comes from a reputable insurance provider established for over 25 years but also:

• Access to a 24hr legal advice helpline
• Access to a legal document hub
• Instant policy documents
• Easy payment options
• Access to a dedicated claims service

9. How can I find a good business insurance broker?

There are a few elements of criteria that indicate a business insurance broker is worth their salt. For example, it’s a good sign if you will be dealing with a person responsible for looking after the policy rather than simply closing the sale, as this will better incentivise them to ensure you get the most appropriate insurance policy.

It’s also a good idea to check the broker you choose is regulated by the Financial Conduct Authority.

Blackmore Borley helps with a range of business insurance and offers a jargon free service that is uniquely tailored to each individual business.

> See also: Small business insurance: What to look for in a policy

10. What else should I know about insuring my business?

Don’t rush your research when looking for suitable insurance. The world of business insurance can be stuffed with jargon, but we hope that our advice and easy-to-understand policy options have cleared much of the confusion.

If you are using a broker, you should expect them to discuss the options with you and address any remaining questions you might have. Or, if you’re buying directly online, just consider that insurance policies can differ in their boundaries and conditions, so always read the small print.

Next Steps

If you’re looking for business insurance and aren’t sure where to begin, why not use our free quote tool to find a tailored commercial combined policy that will cover all your needs.

Simply fill in our free quote-finding form and answer a few questions about your business (it takes less than a minute).

The post Business insurance: 10 common questions answered appeared first on Small Business UK.

What do terms like public liability actually mean? With all the jargon involved in public liability insurance, it can be hard to make sure you’ve got the cover you need.

In this guide to public liability insurance, Patrick Sheerin from Romero Insurance Group has covered everything they feel you need to know, and put it in the most straightforward way possible.

Public liability insurance definition

Public liability insurance is an insurance policy that covers the cost of legal action and compensation claims made against your business. It is specifically designed to protect against incidents involving the public, i.e., if a member of the public suffers injury, or if they suffer damage to their property because of your business. They may make a claim and take legal action against your business even if it isn’t your fault.

Is public liability insurance a legal requirement?

Public liability isn’t always needed, but local authorities, event organisers and local authorities do require it more often than not. It’s available to anyone who runs a business, event or service. Many vendors and venues will require proof of public liability insurance to allow you to utilise their services.

It’s generally advisable to consult with an insurance professional or a licensed insurance broker, who can assess your specific needs and inform you of what level of public liability insurance you require.

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

What does public liability cover?

Public liability insurance policies vary in level of cover; however, they usually incorporate these elements:

Accidents

HSE define an accident as a separate, identifiable, and unintended incident which causes physical injury.

Damage

Property damage is separated into either:

• Physical injury to tangible property
• Lost use of tangible property that is not necessarily physically injured.

What does public liability insurance not cover?

Incidents that don’t involve the public usually aren’t covered by public liability. This type of insurance doesn’t cover accident or injury to you or your employees. Instead, those incidents would be covered by employer’s liability.

What is the difference between public liability and employer’s liability?

Public liability insurance covers claims made by members of the public whereas employers’ liability insurance covers you against employees that have experienced accidents or injury at your business.

Employers’ liability includes both staff and volunteers – anyone your business is responsible for.

If, however, you employ one or more employees, The Employers’ Liability (Compulsory Insurance) Act 1969 requires you to at least have a minimum level of insurance in effect.

Employers’ Liability Insurance explained – Judith Rutherford gives a summary of which businesses need to get Employers’ Liability Insurance and why they should be getting it

How much is public liability insurance?

When quoting for public liability insurance, insurers will consider information like:

• The nature of your business
• How much cover you want to take out
• The risk to the general public
• The size and type of event
• Previous claims history
• Good housekeeping

If you speak to your insurance broker, they’ll be able to produce a tailored quote based on your business.

The most affordable solution for public liability insurance for an event is Insure Our Event. Insure Our Event uses a comprehensive quote form which will learn about your event and provide you the most affordable suitable insurance solution.

How much insurance do I need?

There is no definitive answer because the nature and risk of each business is different.

Cover typically starts at one million pounds, which is suitable for most small businesses. Councils and vendors will usually only accept levels over £5 million, hence that should be considered for event organisers.

Cover can be extended by £2 million, £5 million or even £10 million and more, depending on the protection required to cover the risk. The amount of cover you need will also vary on the size of your business and the perceived risk to members of the public.

For example, if you’re hosting a music festival it may be wise to take out a larger amount of cover due to the many risk factors which could cause injury such as alcohol, electrics and weather.

Ultimately, it’s best to get as much cover as you can afford – it’s always better to be over than under insured.

What types of event insurance are available?

To ensure a smooth-running event, you’ll want an insurance policy which covers what you need and doesn’t charge you for the cover you don’t. Every event is different, so below we have listed some general tailored insurance packages to give you an indication.

One-off event insurance

One-off events, as the name suggests, are events that have a limited lifetime, like birthday parties, carnivals and charity events.

Most one-off events aren’t high cost, but this can change depending on the event. High risk events, for example, carry a high insurance value because of the increased risk.

Wedding insurance

Imagine what could go wrong; a supplier or caterer could let you down last minute, the venue may cancel, bad weather may ruin your outdoor plans, or the entertainment may not show up. Cover your wedding costs and deposits with the best UK wedding insurance provider and decide what level of cover you require through our layered quote form.

Festival insurance

Festival risks are unique, and therefore the insurance policy to cover them has to be unique as well. Out of the million things to consider when organising a festival, insurance can sometimes be the last thing on your mind. But it’s one of the most important things to remember.

Market stall and stallholder insurance

Most stallholders will be required by law to have public liability insurance. Insure Our Event also recommends event equipment cover, event cancellation cover and employers’ liability insurance.

Whether it be at a village fete, a town market stall or at a local craft fair, Insure Our Event will assess your needs and requirements and curate the perfect policy for you. Its stallholder insurance is flexible, able to cover only the areas you require for the ideal tailored policy.

8 payment systems for festivals, pop-ups and street food markets – Take a look at this rundown of payment systems that are ideal for festivals, street food markets, pop-ups and promotional events

Cancellation or abandonment

If you’re hosting the event outside, you have the added stress of unpredictable weather. Even if you’re hosting a small festival in the UK, you should still consider the risk that adverse weather could have on your event.

Cancellation or abandonment insurance affords you the peace of mind in the event that adverse weather conditions cause the event to be cancelled.

Weather isn’t the only reason an event might be cancelled. Festival insurance covers a range of social and legal issues that might cause your event to not go ahead. Whatever it is, if it isn’t your fault, it’s likely you’re covered.

Event equipment insurance

Whether your equipment is leased, hired or owned, event equipment insurance protects it from loss, damage or theft during the event.

Insure Our Event will cover your equipment for up to four consecutive days per single event. This makes sure you’re covered while you set up for an event.

Musicians and performers insurance

An injury to your property or a member of the public during a performance can be a real mood killer. After all the preparation, your great performance can turn sour leaving you with a hefty bill from a large claim.

Even if you’re a solo musician you should still consider getting public liability insurance. And remember, you don’t need to be playing in a venue to think about protecting yourself from accidental claims. That’s especially true if you’re teaching a member of the public either in public, or in their own home.

As a musician, your instrument is your most important piece of equipment. So, you may want to look as business equipment insurance as an optional extra with your public liability insurance. This insurance will cover your equipment if it’s damaged or stolen.

Multiple event insurance

Multiple events insurance is specialised insurance for businesses hosting more than one event. Instead of insuring each individually, if they’re all similar types of events, one policy can help streamline the process. And they’re often discounted versus the cost of insuring each event.

Multiple events insurance can be tailored to exact event requirements, but as a general rule they’ll include both public and employers’ liability cover. To qualify for multiple events insurance, the event must be a repeat (such as a mud obstacle event) where the event carries the same risk each time and they can’t be any longer than three days.

Where can I buy public liability insurance?

For a large corporate businesses or a small enterprise, Romero Insurance Brokers can provide public liability insurance. Their internal claims department will swiftly handle with each public liability claim, and they provide plenty of information and guidance to clients.

For an event organiser or anyone planning on hosting a party or festival, Insure Our Event provide the best public liability insurance prices. Fill out their quote form to price up your event. Limits available are £1 million, £2 million, £5 million or £10 million.

Remember, venues and local authorities are likely to want proof of your public liability insurance before allowing an event to take place.

Patrick Sheerin is content and SEO manager of Romero Insurance Group

More on small business insurance

Employers’ liability insurance – don’t get caught out! – Whatever the line of work, all small businesses will carry an element of risk which could affect its staff

The post Public liability insurance: why you need it appeared first on Small Business UK.

Nearly a million UK small businesses could be unwittingly breaking the law by not having employers’ liability insurance.

Employers’ liability insurance is compulsory if you employ staff, with a few exceptions, yet, according to Aviva, 17 per cent of small businesses do not have employers’ liability insurance. Given that the UK has 5.5m small-and-medium-sized businesses, that’s over 900,000 breaking the law.

And businesses found to be without employers’ liability cover can be fined £2,500 for every day they are not properly insured.

Employers’ liability insurance – don’t get caught out! – Whatever the line of work, all small businesses will carry an element of risk which could affect its staff

Plus you can be fined £1,000 a day if you do not display your EL certificate or refuse to make it available to inspectors when they ask.

Not only is having employers’ liability insurance compulsory but it’s clearly needed. According to the Association of British Insurers, each year insurers pay out nearly £2m settling employers’ liability claims.

That means employers claiming for when their staff are off work either because of physical or mental hurt.

How much does employers’ liability cost?

For an office employee, the average cost of employers’ liability insurance is £61. This rises significantly to £213 per employee if you’re carrying out physical work, such as construction, according to Statista.

The minimum level of employer’s liability cover required for a business is £5 million, which protects businesses and tradespeople against claims for compensation from existing and former employees who are injured or become ill as a result of working for you.

Firms employing close relatives and not a limited company or those where the owner is the sole employee and owns at least 50 per cent of the company’s issued share capital are however exempt.

More on employer’s liability insurance

Employers’ Liability Insurance explained – Judith Rutherford gives a summary of which businesses need to get Employers’ Liability Insurance and why they should be getting it

Small business insurance: What to look for in a policy – In this piece, we look at the variety of business insurance cover you should consider in your small company

The post Businesses breaking law over employers liability insurance appeared first on Small Business UK.

In some situations, insurance is a necessity. If you’re taking on staff, for instance, the law says you must have employers’ liability insurance in place. Depending on your field, you may also find that your clients require you to be covered against certain risks before they consider doing business with you.

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

Then there’s a range of insurance coverage that isn’t an absolute requirement but still needs to be on your radar. As well as giving you peace of mind, having comprehensive insurance cover helps to show your customers that you’re serious both about your business and their safety. What’s more, if something does go wrong and you’re faced with a potential claim, having an insurer on board to steer everything through can save you a great deal of hassle.

Related: Small business insurance: An essential guide

So what should a small business be looking for in a policy? We take a look…

Public liability insurance

With public liability insurance, you are covered against claims for injury to members of the public and for damage to property belonging to another business or individual. This should be on your list if members of the public such as customers and suppliers visit you on your business premises – including your home if that’s where you work from. It also needs to be considered if you conduct your business activities off-site.

What to look for:

• Level of cover: the lowest standard general level of coverage is £1 million. For the vast majority of small business, this should be sufficient. Take care, however, if a lot of your work is on customers’ properties. Are you going to be bidding for contracts in big corporate premises? Do these customers tend to stipulate a higher level of cover before granting contracts? If so, protection for £5 million or £10 million may be necessary.
• Level of excess: a cheaper policy may appear good value but what level of outlay are you expected to meet on each claim?
• Business activities covered: as always, it’s a matter of checking the endorsements and exclusions. Check whether claims arising out of activities conducted at height are excluded, for instance.
• Is ‘defective workmanship’ specifically excluded? If so, it may also be prudent to consider indemnity insurance in addition to standard public liability cover.

Employers’ liability insurance

With some very limited exceptions (e.g. if you only employ close family members), employers’ liability insurance is an absolute requirement if you take on staff. The minimum allowable cover limit is £5 million and you can be fined up to £2,500 for each day you’re not covered.

What to look for:

• If you rely on occasional contract, seasonal or occasional staff, make sure your policy covers these as well.
• The policy may specifically exclude incidents that occur when driving as these will be covered separately by your firm’s motor insurance policy. If it is included, make sure you are not paying twice for essentially the same cover.
• This category of insurance covers your business against claims by your employees in the event they suffer injury in the course of their work. You may also wish to consider the wider implications of what would happen if one of your team dies or becomes unable to work. Consider Key Person Insurance to protect your business against lost income should something happen to an invaluable team member.

Related: Employers’ liability insurance – don’t get caught out!

Professional indemnity insurance

In some professions such as law, accountancy and architecture, professional indemnity insurance is an absolute requirement. More widely, anyone who provides professional advice to their clients (e.g. management consultants and IT contractors) should consider it. The precise scope of the coverage will depend on your sector. As such, it’s highly advisable to consult a PII specialist with experience of your niche before you purchase a policy.

What to look for:

• Does the policy comply with the standards set by your profession’s governing body or professional association?
• Are errors and omissions, damage from latent faults and claims arising out of a failure to meet time limits all included?
• Are stipulations provided on what to include – and what not to include in your client contracts? Are you clear on this?
• Professional negligence claims can be complex. Is there a clear procedure on what the insurer will do – and what you will be expected to do in the event of a claim?

Other areas of cover

Those hard-won first contracts tend to be critical to the success of your business. In light of this, credit risk insurance is worth considering to reduce the risk of exposure to customer non-payment, including targeted cover that applies to certain specific customers becoming unable to pay.

Buildings content insurance is essential and you should consider taking out specific cover for business-critical plant and machinery.

Cyber Insurance comes in two main flavours: – “first party” coverage and “third party” coverage. First party coverage relates to your business and the various costs involved in remedying a cyber attack. Third party coverage is more about your customers, specifically the costs of legal claims that might be made against you.

Product liability insurance is similar to public liability insurance, in that it covers compensation claims due to injury or damage caused to a member of the public. The difference is that the injury or damage is caused by a product that has been supplied, installed, maintained or manufactured by you. For example, faulty wiring in a remote control car causes the toy to overheat and catch fire. The product liability policy could cover compensation claims for subsequent property damage. It’s important to recognise that this doesn’t act like a warranty: it won’t provide cover if the product fails to function properly or stops working.

Bundling your policies

Does all of this sound like a lot to juggle? It’s worth bearing in mind that brokers are able to put together packages tailored to the needs of individual businesses. Typically, this includes public liability insurance with any necessary add-ons to cover the nature of your particular work. It can also include employers’ liability and professional indemnity cover where relevant. This ‘bundled’ approach can take away a lot of the hassle of getting your insurance sorted out. As with any insurance product though, it’s always worth shopping around for the best deals.

Further Resources:

• What is commercial combined insurance? – A package of policies allowing you to buy multiple types of coverage in one go.
• Do sole traders need professional indemnity insurance? – Some do, some don’t. Find out more here.
• Understanding Employers liability insurance – A guide from The Association of British Insurers

The post Small business insurance: What to look for in a policy appeared first on Small Business UK.

What is employers’ liability insurance?

Employers’ liability (EL) insurance is compulsory insurance for most employers in the UK (under the Employers’ Liability Act 1969). It is to cover injury or sickness to an employee as a result of workplace conditions.

The insurance covers compensation and legal fees for every employee, whether they are full or part-time, working from home or temporarily. The bottom line is if they are working for you in some capacity, you’re required by law to cover them.  

You will need to purchase employers’ liability insurance as soon as you take on your first employee. You can get help from an insurance broker to do this via the British Insurance Brokers’ Association (BIBA).

You must also be covered for at least £5 million and have your EL certificate displayed in the workplace or have it ready to produce to an inspector – otherwise, you could be fined £1,000.

Previous EL records/certificates should never be disposed of as claims can arise a long time later due to various diseases, for example, taking a long time to develop.

According to the gov.uk website, a company can be fined up to £2,500 for every day they are found to not be properly insured.  

How do you purchase employers’ liability insurance?

Employers’ liability insurance is not often bought as a standalone policy. It is generally combined with a public liability (PL) insurance policy.

While employers’ liability insurance covers anyone working for the business, public liability insurance covers any injury to the public or any third party engaging with the business. Although PL is optional, it will be proven a valuable purchase if the business comes into contact with the public as it will cover any claims made by the public who have been negatively affected by business operations.

What is public liability insurance, and does it cover Covid-19 claims? – Public liability insurance can cover your small business if a third party has an accident or injury. But does public liability insurance cover claims made against your business arising from Covid-19?

Your EL insurance policy premium will depend on the nature of the business, the number of employees and any previous claims.

Manage health & safety

An employer is responsible for the health and safety of its employees and is required by law to ensure they are protected while at work.

Minimise the risk of a liability claim by planning and implementing a coherent health and safety policy/strategy which include frequent risk assessments.

Managing health and safety in the workplace – What are your responsibilities as a small business owner when it comes to health and safety? Donna Obstfeld of DOHR explains

Additionally, the HSE perform random inspections to ensure that the working area is safe and complies with regulations. Not only will the health and safety of the business be inspected, they will also request a valid EL certificate – which should always be visible to employees. It can be displayed in an electronic format.

Employers’ liability insurance exemptions

There are some exceptions. These include most public organisations such as government departments and agencies, local authorities, police authorities and nationalised industries and health service bodies.

Sole traders with no employees and employers taking on only close family members (and which is not a limited company) are also exempt. Sole traders with any work experience students and voluntary/unpaid ‘helpers’, however, will be classed as an employee and employers’ liability insurance will be required.

If you think your business may be exempt, you can check on the Health and Safety Executive (HSE) website, here.  

The purpose of this guide is to give an understanding. It is not a legal interpretation of the Employers’ Liability Act and has no formal legal status.

More on employers’ liability insurance

Employers’ liability insurance – what is it and do you need it? Here, we answer all of your questions around employers’ liability insurance – how much will you pay and what happens if you don’t have it?

The post Employers’ liability insurance – don’t get caught out! appeared first on Small Business UK.

Employers’ Liability Insurance (ELI) is a legal must if you have employees and it must be at least £5,000. If you don’t have Employers’ Liability Insurance, you’ll be fined £2,500 for every day you’re not properly insured. On top of that you could face a £1,000 fine for failing to display your ELI certificate or refuse to make it available to an inspector when asked.

Do I need Employers’ Liability Insurance?

Employers who have more than one employee must provide liability insurance cover – but with some notable exceptions. As a general rule of thumb, you will need ELI for someone who works for you, if:

• You deduct national insurance and income tax from the money you pay them
• You have the right to control where and when they work and how they do it
• You supply most of the materials and equipment
• You have a right to any profit your staff make and you will be responsible for any losses
• You require that person only to deliver the service and they cannot employ a substitute if they are unable to deliver it
• They are treated in the same way and work under the same conditions as your other staff

How much control you have over the person’s working patterns and location is key here. You will probably not need Employers’ Liability Insurance for someone who works for you, if:

• They do not work exclusively for you, e.g. in the case of an independent self-employed contractor
• They supply most of the materials and equipment they need to do the job
• They are in business for personal benefit
• They can employ a substitute if they are unable to do the job themselves
• You do not deduct national insurance or income tax (but remember they may still be classed as an employee based on other indicators)

Where can I find an Employers’ Liability Insurance provider?

I would suggest taking legal advice if you are in any doubt over whether you require ELI or not. If in the case that you do need to have it, it is very important to use an authorised insurer when you take out ELI, such as those companies working under the terms of the Financial Services and Markets Act 2000. By using an unauthorised insurer you may be breaking the law. The Financial Conduct Authority keeps a register of authorised insurers, which is available on its website www.fca.org.uk/firms/financial-services-register.

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Business insurance: Everything you need to know – Insurance offers vital protection from the crippling costs of a claim against your business. But which insurance do you actually need and which is merely optional?

What insurance do I need for my beautician business? – We help you to scope out what insurance you need as a beautician as well as the need-to-know extras and restrictions

Does a company need insurance for one employee but two directors? – Does a company need any insurance if it has just one employee but two directors? If I do, would that still be the case with just one director who is the employee?

The post Employers’ Liability Insurance explained appeared first on Small Business UK.

Beauty has more obvious risks than some other professions: straightener burns, allergic reactions to various creams, slips on tile floor spillages. That’s why you need beautician insurance.

Policies can cover a wide range of specialisms, including:

• Hairdresser
• Barber
• Make-up artist
• Nail technician
• Manicurist/pedicurist

The individual treatments that are insured can be even more diverse and very much dependent on the policy.

Here is a rundown of the cover that you need by law, what is recommended and which restrictions you need to be wary of.

What insurance is legally required by beauticians?

If you have any employees at all, even an apprentice who’s working with you for a few weeks, you absolutely need employers’ liability insurance.

“Employers’ liability – even for volunteers and students – is a legal requirement as they can become ill or injured and take legal action against you,” says Jemma Holloway of Direct Line for Business.

“Or it could be for a spray tan treatment where they’re not told how to wear the mask properly and become unwell.”

You could face a hefty fine without this insurance, so make sure you have it in place.

What other insurance would be useful for my beauty business?

Public liability insurance covers you for any damage you do to a member of the public or their property. Holloway points to spilling wax on somebody’s clothes as an example. It could also be a case of staining the carpet in a client’s home if you’re a mobile beautician.

Some restrictions lie within public liability insurance. “Check which treatments you’re covered for – lip fillers and botox are often exempt,” says Holloway.

That’s where your supplementary cover comes in. Beauty treatment liability cover is for injury or illness caused by a treatment rather than by you. It could be burning, scarring or an allergic reaction.

Treatment liability covers legal defence fees if you get sued and compensation if you are found to be liable and need to pay up for damages. You’ll need it for riskier procedures including body wraps, ear piercing and hot stone massage – if you want to offer these services, do check they’re on your policy before you sign anything. Treatment liability should also be considered for lower-risk treatments such as ear hair flaming, face masks and dry and wet shaves.

Common exclusions on this cover include:

• Botox
• Hair removal
• Medical procedures
• Electrolysis

Similarly, product liability insurance covers you for a product you use on a client – or one that you supply to them – which turns out to be faulty or cause damage to their property.

Your next priority should be your stock. How would your business cope without certain pieces of kit? Think about your GHD straighteners, nail lamp, nail polishes or anything of value. Even if you only rent equipment, you’ll still need insurance in case of incidents like floods or fire. You may need add-ons for moving equipment around if you’re a mobile beautician too.

Covid-19 brought the lesser-known business interruption insurance to light as firms across the country were forced to close. Holloway explains what it is:

“Business interruption insurance is great for any small business. It covers loss of income that you experience when you can’t work but it’s important not to confuse it with personal injury cover. For example, it’ll come in handy if your property floods and you have financial losses because you can’t operate.”

As always, read the terms and conditions carefully. In a widespread incident such as the pandemic, it may be more difficult to secure a pay-out. Read more in Small firms win pay-outs in Covid business interruption insurance ruling

You’ve also got more standard optional extras like personal accident cover (covering you or an employee for an accidental bodily injury) or legal expenses (cover for certain legal action that may be taken against you). If you want to pass on your wisdom, some insurers also offer teacher training insurance. On the other side, there is student insurance which can cover you while you learn your craft.

What restrictions might I come across?

Longer-term treatments like body piercing, permanent make-up treatments and sunbeds may not be included in your policy, so watch out for that. Holloway points out that hair dying might not be covered either.

‘Body piercing, permanent make-up treatments and sunbeds may not be included’

For treatments like these, check which insurers include them as standard and which ones can add them on as an extra.

How do I find a policy that’s right for me?

Like other types of business, your beautician insurance can be tailored to you.

“Insurers are moving away from package policies,” says Holloway. “Businesses can choose how much cover they need.”

It’s always worth scouring the small print to make sure that you’re certain what is and what isn’t covered in your policy. If anything is unclear, ring up your insurer.

Renée Thornley runs La Belle Jolie in south east London and is a member of the British Association of Beauty Therapy and Cosmetology (BABTAC). She talks about finding the right policy and the changing nature of insurance.

How was your experience of finding insurance that was suitable for La Belle Jolie?

I’ve only ever been with one insurer for the last 30 years, who has provided me with the specialist cover I need that makes me supported and safe. When I started out there was no internet so it was important to me that I went with the most reputable professional body you could find as it is also important to clients that you are represented by a body that carries the gravitas required for your business.

What restrictions did you come across when you were doing your research?

The only restrictions were in approaching non beauty-based insurers they weren’t prepared or able to cover you back then.

What extras did you need for the business? What about cover for pregnant and post-natal women?

When I started in the industry, pregnant woman or clients with specialist medical conditions were all covered under your treatment policy – there wasn’t any differentiation. We weren’t such a litigious society back then.

I also worked as a volunteer when I started out, providing treatments in palliative care where we were all feeling our way in the dark slightly. There were no specialist qualifications for cancer care. As long as you were working with oncologists, or with a doctors’ permission, you were covered.

What advice do you have for other beauticians looking for an insurance policy?

Never work without insurance and look for companies that specialise in your field, particularly in the present climate with legal companies making wild claims about the size of compensation payouts they can extract from salons.

Keep detailed records and always report and document anything suspicious to your insurer immediately. I was once the victim of a bogus claim and the calm, solid advice and support I received kept me sane. Once I had handed over my evidence file to my insurers, the other party dropped the claim immediately.

Your insurance policy is your safety net; there are criminals out there now who specialise in making fraudulent claims against salons, so don’t leave yourself open and vulnerable. You are prey to all manner of unpleasant situations and your insurance policy is your best friend.

Read more

How to market your small hair salon – Here, Rob Straathof looks at the ways in which to generate interest online in a local salon

Starting your own hairdressing salon business – Hairdressing tops other professions for happiness levels and as an industry that attracts 340 million client visits a year, you can see why. So get chopping with our guide and start making waves as a salon owner

Starting a beauty business: mobile vs salon – Salon Gold explores the pros and cons of starting a mobile beauty business vs starting up a salon on the high street

The post What insurance do I need for my beautician business? appeared first on Small Business UK.

The moment you start selling a product or service, your company is out there in the wild. Simply by existing, your business is at risk from things like fires, floods, lawsuits, cyber attacks and so much more. Hopefully you’ll never have to deal with any of these things, but many business owners choose to protect against them just in case.

With so many options out there, it can be hard to know where to start. Commercial combined insurance can take away some of that stress, by allowing you to buy multiple types of coverage in one go. That’s why it’s called “combined” insurance, in that you can handle lots of different problems with a single policy, like an insurance Swiss Army knife.

How does commercial combined insurance work?

You could compare commercial combined insurance policies to package holidays too. By buying various types of business cover together, the idea is that you’ll save money and effort in the long run, with something that’s also tailored to your needs.

Let’s say you run a manufacturing business that makes aeroplane parts. You’ll have a factory space, where you have all your equipment, machinery and the people who work for you. You’ll probably have somewhere you store the aircraft components you’ve made too, along with vehicles to transport those finished aircraft parts to paying customers. 

Each of those areas – staff, stock, warehouse, equipment, goods in transit – can all be insured. If you wanted, you could go to different insurers to buy a separate policy for cover against each specific risk. Or you could just speak to a single provider and get everything sorted in one fell swoop. 

The actual process of taking out commercial combined insurance is like other types of business insurance. Providers will look at your business, consider what’ll need insuring and assess how risky your operation is overall, by examining things like your turnover, claims history and industry sector. Then they’ll use that information to come up with a policy that suits you, which you can work with them to fine-tune.

What does commercial combined insurance cover?

If you’re in the market for a type of commercial insurance, the chances are you’ll be able to weave it into a combined policy. So there’s a pretty broad range of coverage available, but a lot of package policies tend to include one or more of the following:

1. Public liability insurance: Coverage in case a customer or member of the public takes your business to court for a personal injury or property damage claim
2. Employers liability insurance: A type of insurance you’re legally required to have, which protects your business against compensation claims if your employees get ill or injured through work
3. Products liability insurance: Coverage which relates to the products your business makes, fixes or supplies, and insures against them being faulty and causing harm
4. Warehouse insurance: With this type of cover, you can safeguard against the theft or damage of stock held within your warehouse
5. Business interruption insurance: Insurance that covers against financial losses from a fire, flood or other unexpected events

You might also look to protect against things like loss of licence, deterioration of stock and even terrorism. The same goes for insuring your computers, other equipment, the cash you keep on your premises and so many other areas. It all depends on the line of business you’re in and what events could cause you to lose money, stop trading or end up in court. 

Why do businesses take out commercial combined insurance?

One of the main draws with combined policies is that they’re flexible. Rather than a one-size-fits-all approach, combined commercial insurance allows you to get something more personalised, with elements you can usually adapt, add on and remove as you see fit. 

Another reason businesses seek out a package policy is to save money, like buying in bulk. But it goes further than that too, by giving you peace of mind as a business owner. Having all the bases covered means your business can benefit from far-reaching protection. 

Commercial combined insurance isn’t a one-off purchase either, since you’ll be paying your premiums each month, possibly for decades to come. By bundling all of your insurance policies together, you take away the bother of dealing with multiple providers and payments. So perhaps the biggest benefit of all is that you’ll save yourself a whole lot of admin headaches. 

What kinds of businesses take out commercial combined insurance?

Since combined insurance can incorporate such a broad range of insurance coverage, it appeals to a wide range of industry sectors. It all depends on what your business does, and the type of coverage you’re after. 

That said, if you run a pretty limited operation, you may not need something so exhaustive. Commercial combined insurance works best for companies with lots of moving parts, which would benefit from grouping all of their premiums together under one umbrella. Builders and developers are a great example, since they deal with property, contractors, employees, transportation, equipment and more, sometimes in potentially dangerous working conditions. 360-degree insurance protection can be a vital part of any development project. 

But there’s many other complicated businesses that can benefit from a commercial combined insurance policy too. You might run a wholesaling business, an accounting firm, a restaurant group, or something else entirely. Whatever you do, it’ll help to speak to somebody from an insurance company first, who can help you figure out what’s right for your business.

If my business has previous claims, can I still get commercial combined insurance?

When an insurer puts together a combined policy, they’ll look at the potential risk you present to their firm. A big part of that could be the claims you’ve made in the past. 

If you have made historical claims, that’s by no means a deal-breaker – but you can do yourself a favour by showing that you’ve taken action to reduce the likelihood of something similar happening again. You might introduce enhanced security, change the way you work or improve company processes. Either way, showing that you’ve learned from the past certainly won’t hurt. 

Ultimately, the best insurance deals are a two-way street, with advice from your provider and careful thought from you. In the same way that a parent may take out life insurance to protect their family, commercial insurance is all about safeguarding. By dealing with every potential risk at once, you can put that protection in place in a far easier way. 

Find commercial combined insurance now

Now that we’ve examined why commercial combined insurance might be useful for your business, you may have realised you want to get protection or evaluate your current cover.

If you’re looking for business insurance and aren’t sure where to begin, why not use our free quote tool to find a tailored commercial combined policy that will cover all your needs.

Simply fill in our free quote-finding form and answer a few questions about your business (it takes less than a minute).  

The post What is commercial combined insurance? appeared first on Small Business UK.

Although being your own boss has plenty of benefits, it also means the buck stops with you. You’re on the hook for winning clients, delivering work and making sure you get paid for it. The same goes for keeping track of what you earn and putting the right amount away, so you can pass along what you owe to the taxman.

In between all of your other responsibilities, it’s easy to forget to protect your business too. It’s hard to envisage any customer being unhappy enough to sue, but mistakes happen – and when they do, they can cost you and your clients a lot of money. One way to equip your business to deal with the possibility of legal action is through professional indemnity insurance. 

What is professional indemnity insurance?

Professional indemnity insurance is used by sole traders, freelancers and business owners to secure against being sued by clients who say they’ve suffered a financial loss, specifically due to a mistake they claim you’ve made. The main things this type of insurance covers are your legal fees and the costs of resolving the issue in question. 

As a bookkeeper, for instance, you’re entrusted with making payments on behalf of clients. If you were to be tricked into sending money to a fraudster through a phishing email, your client could accuse you of professional negligence, since you’ve lost them money doing the job they hired you to do. If you have professional indemnity insurance and your claim is approved, your insurer could help you settle the issue by stumping up the cash to compensate your client and any legal costs if it goes to court. 

Managing client data is another area where professional indemnity insurance has become important. Let’s say you’re an IT consultant who stores and maintains data for clients. If you outsource your servers or backup processes, and those fail, vital client data could be irrecoverably lost. If a client loses data and launches a legal claim against you, professional indemnity insurance could pay for the cost of replacing their lost data and any legal bills.

What does professional indemnity insurance cover?

A lot of professional indemnity revolves around the term “negligence”. According to insurance provider Hiscox, professional negligence is when you fail to perform your “responsibilities to the required standard or breach a duty of care.” Here’s another way of putting it: if somebody hires you to do a very specific job, and that’s where you slip up, that could be called negligence. 

You’re more likely to have a claim made against you if you’re a consultant, bookkeeper or a surveyor, for example, where you’re expected to be an expert. Mistakes in these areas feel like professional negligence as you have clear responsibilities, which can be particularly costly because they relate to somebody’s business, finances or home. Even if you’re careful and have good systems in place, small errors can have far-reaching effects. 

Negligence is also one of the main areas covered by professional indemnity insurance because it crosses over into other reasons clients might take you to court. Professional mistakes can overlap with claims around intellectual property (IP), for instance, where you might have accidentally used someone’s IP without their permission. The same goes for unintentional defamation, where clients believe that you’ve said something that could damage their reputation, and breach of confidence, where a client claims you’ve shared sensitive information without their permission. Then there’s the possibility of lost or damaged documents too, which increasingly applies to data. These are only a few examples.

Do sole traders need professional indemnity insurance? Who needs it most?

Plenty of sole traders won’t need professional indemnity insurance, mainly because their line of work won’t involve mistakes that could cost clients money. But if you give advice, offer a professional service, handle data or copyrighted materials, or could risk damaging someone’s property, professional indemnity insurance could be well worth your while. 

Areas where professional mistakes are more costly – and more readily associated with the reason they hired you to do the job – are where this type of insurance is most likely to be needed. That means accountants, bookkeepers, marketers, designers, business advisers, architects, IT consultants, property professionals and many more. For jobs with industry regulators, like accountants, architects and financial advisers, professional indemnity insurance is compulsory.

If you run a clothing shop, for example, you’re probably less likely to need professional indemnity cover. Still, there are exceptions to these rules: if your shop also happens to mend customers’ clothing, and it gets lost or damaged on your watch, that might be a scenario where professional indemnity insurance could help. 

How does professional indemnity insurance compare to public liability insurance? 

Although professional indemnity insurance and public liability insurance sound similar, they’re slightly different. Public liability relates to claims by members of the public for injury, illness or damage, such as a customer slipping on a wet floor on your premises, or a customer getting ill from food you’ve served them. 

As we’ve seen, professional indemnity is all about mistakes or negligence, where clients say they’ve lost money. Public liability is broader: in addition to customers, it extends to suppliers and even passers-by. Still, both types of insurance do have one thing in common, in that they’re about protecting your business from certain eventualities and their associated legal costs.

How much professional indemnity insurance cover do I need?

Brokers like Moneysupermarket say that professional indemnity insurance can cover you anywhere between £50,000 to £5m and above, while some high street banks put the lower limit around £250,000. Either way, there’s a big range and the amount of insurance cover you need depends on what your business does. It’s easier to get a benchmark if you’re a member of an industry body, like the FCA, which may specify a minimum level of professional indemnity insurance that its regulated businesses should hold.

Likewise, a client contract may require you to have a minimum amount of insurance before you can start any work. In any case, it’s up to you to decide if you need a higher level of cover. It’s not an exact science, but another way to reach a rough figure is through mapping out some worst-case scenarios, by looking at the size of your contracts and the potential cost of a compensation claim if a big mistake was made. Some providers, like PolicyBee, provide a list of real-life professional indemnity claims, which mention how much the insurer paid out. 

How much does professional indemnity insurance cost?

As with most business loans, the cost of professional indemnity insurance hinges on what you do, how much you need and the risk involved. A key factor insurers are interested in is the size of your business, so they’ll look at your annual turnover to work that out. Just as life insurance costs more if you’re older, businesses that make more money are considered more of a risk, which means their insurance will probably cost more.

The type of service you provide is also important, as some professions and industries are seen to be riskier than others. If you do a job where mistakes can be particularly costly, like the various advisory roles we’ve listed in detail above, you can expect to encounter higher insurance premiums.

Ultimately, professional indemnity insurance won’t be right for every sole trader. But for those who work in sectors where costly mistakes can happen, it could make all the difference. 

Find professional indemnity insurance now

Now that we’ve examined why professional indemnity might be useful for your sole trader business, you may have realised you want to get protection.

Why not use our free comparison tool to be matched with the most suitable provider for your needs.

Simply fill in our free quote-finding form, and answer a few questions about your business (it takes less than a minute). We’ll match you with the most appropriate insurance provider.

The post Do sole traders need professional indemnity insurance? appeared first on Small Business UK.

Business insurance is a vital safeguard for you, your employees, and anyone else your business comes into contact with, including contractors and the general public. 

If the worst should happen, and your business is at fault, failure to have adequate insurance in place could see you hit with punishing costs in the form of legal fees and compensation payouts. 

That’s why you should take out a comprehensive insurance policy as soons as possible. But as some insurance is required by law, other insurance is advisable, and some isn’t necessary for your business, what should you actually include in your policy?

On this page we’ll explain the key types of insurance every business owner either needs or should seriously consider taking out. 

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

Business insurance required by law

Employers’ liability insurance

If one of your employees suffers an accident, injury or illness as a result of working for your business, you could be liable.

Employers’ liability insurance, which is a legal requirement, covers any legal or compensation costs arising from a claim made against your business by a past or present employee. 

Even if you have just one employee, you must have employers’ liability cover of at least £5m. Many policies offer a cover limit of £10m as standard. However, there are a limited number of exceptions, including if you are a publicly funded organisation or if you employ only family members. 

Any business that does not have the required employers’ liability cover could be fined up to £2,500 for each day they do not have adequate cover in place.

Motor insurance 

If your business uses any motor vehicles, you’ll also need to have motor insurance.

You must have third-party motor insurance at a minimum, which covers you in the event that someone is injured or their property is damaged by one of your vehicles.

According to the law, your motor insurance policy must have unlimited cover for personal injury and at least £1m for property damage.

Find and compare insurance for your small business now

Additional covers for compensation claims and legal action

Your business could also be held liable if a customer or member of the public is injured or their property is damaged on your premises or as a result of your work.

That’s why, although it’s not a legal requirement, we’d strongly advise taking out public liability insurance, which can contribute to any compensation and legal costs if a claim is made by a member of the public.

>See also: What is public liability insurance, and does it cover Covid-19 claims?

If your business gives professional advice, you could also include professional indemnity insurance. This covers the cost of defending and settling claims against you for making a mistake, being negligent, or giving poor advice. For example, if your advice damages a client or customer’s reputation or causes them financial loss.

Professional indemnity insurance is not a legal requirement, but in certain sectors, there are professional bodies and regulators that require you to have a minimum level of cover.

Property insurance

If your business owns property, buildings insurance helps to pay for unexpected damage to the premises from something such as a fire or a flood. The cover can include accidental damage, as well as costs for things like identifying the source of a gas or water leak.

When deciding how much property insurance cover you need, you should take into account the cost of repairing or rebuilding the property, replacing any fixtures and fittings, and site clearance. As the rebuild cost is different to the property’s market value, don’t forget to include the cost of professional fees for a valuation assessment as well.

Even if you don’t own any property, you should probably have some level of contents insurance in place to cover the cost of theft or damage to any of your essential equipment, furnishings, fixtures, and stock.

Financial insurance

Things could be going very well, but if a customer goes under or is unable to settle their invoices, it could seriously damage your cash flow and put your business at risk. That’s why trade credit insurance, which protects you if a customer pays late or becomes insolvent, is vital for any business that sells goods or services on credit terms.

It can also can give you the confidence to expand and build commercial relationships, and make your business more attractive to potential investors and partners.

Cyber insurance

As well as transforming the way businesses operate and interact with each other and their customers, the digital world has created a host of new threats, such as online fraud and data theft. Criminals could lock you out of your own IT systems, steal sensitive data, or trick you into handing over money.

That’s why any modern small business should seriously consider cyber insurance. It can help to cover the costs of getting you back up and running after a cyber attack and even repair any resulting reputational damage. It can also compensate you for loss of income caused by a data breach and offer financial protection against claims for falling foul of GDPR regulations.

Insulating your business from risk

The right blend of insurance policies can give you peace of mind by mitigating the debilitating costs of a lawsuit made against your business in the event of an accident, injury, or other disaster. 

However, you’re not completely off the hook. You should still assess any potential risks up front and put in place measures that protect your business, employees, customers, and members of the public to minimise the chance that you’ll ever have to use your insurance.

Your insurer can give you advice on how to identify and manage risks effectively, and can provide support by responding quickly and effectively when things do go wrong.

And while there are many other more targeted and specialist types of insurance available, the above should form a large part of a comprehensive business insurance plan.

Find insurance for your small business now

Now that we’ve examined the key types of business insurance, you may have realised you want to look at your existing policies or sign up for new ones.

If you’re looking for business insurance and aren’t sure where to begin, why not use our free quote tool to find a tailored commercial combined policy that will cover all your needs.  

Simply fill in our free quote-finding form and answer a few questions about your business (it takes less than a minute).  

Further reading

What is professional indemnity insurance?

The post Business insurance: Everything you need to know appeared first on Small Business UK.

Right now, almost every business relies on digital technology in some shape or form. But whether it’s using software, selling your products online or simply storing data in a spreadsheet, these systems and networks can also make your business vulnerable too. 

In the same way that your home could be burgled or flooded, sole traders and businesses of all sizes are at risk of a range of cyber attacks and other related issues. Cyber insurance can help, not just by allowing you to recover from an incident, but also by covering the costs of restoring your reputation and defending your business if it’s sued.

Cyber attacks are an ever-present threat to businesses all over the world, with 39 per cent of UK companies identifying a cyber attack against them in 2021. If the worst happens, the right cyber insurance coverage can provide the financial protection to help your business get back on track. 

How does cyber insurance work?

Let’s say you run an accounting firm. If one of your employees accidentally clicks on a suspicious link and that link contains ransomware, all of your systems could be blocked until a ransom is paid. In one fell swoop, your practice would compromise clients’ financial data, damage its credibility and be prevented from delivering its services until the block is lifted. 

If your business is covered by cyber insurance, your claim might involve paying the hackers, hiring a PR agency to improve your practice’s reputation and compensating for lost income while your network was down. If your firm faces legal action, you could claim for that too, depending on what type of coverage you have. 

43% of employees say they’ve made a mistake at work that has compromised cyber security. And these mistakes don’t just relate to attacks from criminals: they can include things like leaving a laptop on a train or documents on a park bench; even handing the wrong hard drive to a courier. If those items contain sensitive information, then losing them can be just as damaging as a cyber attack. 

Cyber insurance is like other types of insurance, in that it’s designed to protect against an incident and cover costs your business wouldn’t be able to afford on its own. Businesses can use cyber cover to pay for the fallout from a data breach, which involves notifying customers, investigating what’s happened, recovering what they’ve lost and compensating for a period without trading. But cyber security incidents can be the result of a simple but far-reaching instance of human error too.

What does cyber insurance cover?

According to Hiscox, an insurance provider, the median cost of a cyber attack is now almost £15,000. But the money involved in dealing with a cyber crime or incident can add up very quickly, reaching into the hundreds of thousands and millions for bigger organisations. 

One reason cyber insurance claims reach such high figures is that there’s two types of coverage, which both have a lot of moving parts: “first party” coverage and “third party” coverage. First party coverage relates to your business and all the various costs involved in remedying what’s happened, which as we’ve seen could mean anything from ransom payments to PR activity to customer comms. 

Third party coverage is more about your customers, specifically the costs of legal claims they might make against you, such as damages, settlements and your legal defence if it goes to court. If your business doesn’t look after a lot of customer data, then you may not need third-party cyber insurance.

What isn’t covered by cyber insurance?

Cyber insurance policies usually cover quite a few different eventualities, but that doesn’t mean they cover everything. Intellectual property theft as a result of cyber crime, which can do serious harm to your brand and lose your business a lot of money, won’t always be covered, for instance. Still, you can get this type of coverage separately, with business intellectual property insurance.

It’s always worth paying close attention to your policy, as sometimes fairly common incidents aren’t covered, like money lost through business email compromise fraud, where scammers send fake emails asking for money or sensitive information and link to bad websites. The same goes for the cost of improving your systems and introducing new measures after an attack, like training employees to identify common attacks. Your policy will usually cover the immediate aftermath of an incident, but it’ll probably stop there.  

What types of businesses need cyber insurance?

If you store important data online or on computers, you may need cyber insurance. That’s because almost every type of business holds personal information about its employees, like names, passwords, phone numbers and email addresses, which hackers can use for identity theft and sell to other criminals. The same goes for billing info and credit card details, which can be used for fraudulent purchases. 

Still, different types of businesses need different types of coverage, usually depending on what kind of data they hold. With first party coverage, you’ll probably be insured against ransomware attacks, which the UK’s National Cyber Security Centre says is the most significant cyber threat facing the country. With this type of coverage, your insurer can step in to cover the costs of the ransom, subject to your claim being approved and the limits of your policy.

If your company doesn’t just store information about staff, but information about customers too, then it’s worth looking into third party coverage. The difference with this type of insurance is that it covers legal fees, in the event customers sue because of a data breach on your watch, for example. This type of insurance can also cover fines, which can be useful if you have a particularly large customer base or operate in specific sectors where regulatory oversight is more likely.

How much does cyber insurance cost?

As with any insurance, cyber insurers will look at what industry sector you’re in and how much money your business makes, to measure the level of risk. Businesses in the finance and healthcare spaces, for example, may hold more personal data and require a higher level of coverage as a result.

But cyber insurance can be more specific too, in that insurers will also look at what type of data you hold and how secure your business is. If your organisation has already completed a government-backed certification like Cyber Essentials, which protects you against the most common threats and shows you’re serious about cyber security, you may be able to get a better deal. 

How much cyber insurance coverage do I need?

If you’re able to map out the financial impact of a major cyber attack, by looking at how much it would cost to notify customers, get your services back online and restore your reputation, you may be able to get a sense. But there are a huge amount of variables to consider. You’re probably better off speaking to a broker or an insurer directly, who can provide a personalised quote based on your business. 

Cyber insurance is a complicated space, that requires a lot of careful consideration from you and your insurer. But it’s likely to be worth your while, since almost every business is vulnerable to attacks and cyber security-related issues. By insuring against the fallout of an incident, you can focus on running your business and put your mind at ease. 

The post What is cyber insurance? appeared first on Small Business UK.