Setting up a business is no mean feat, there are many things to consider and often insurance can be overlooked.
Depending on the type of business you operate choosing the correct business insurance to suit your needs is relatively straight forward. You will need to consider the size of your company and the assets you need to protect.
Things you need to know:
According to the Employers Liability Insurance Act 1969, any business in the United Kingdom that employs one or more staff is required to have Employers Liability Insurance, by law.
Employers Liability is designed to ensure that the business is covered in the event of a member of staff being injured or is taken ill whilst at work and a claim for compensation is made.
Businesses exempt from the above include: government departments and non limited family businesses – all other businesses MUST have an active policy in place to comply with legislation.
How much cover is needed?
£5 million is the minimum level of Employers Liability Insurance available, the most common cover is £10 million, even for relatively small companies this is the more popular choice. The amount of cover you require is obviously dependant on the type of business you run and the risks involved in the work undertaken – as an insurance broker it is our job to make sure you have the right cover for your requirements.
If you are found not to have adequate (or no) employers liability insurance the HSE (Health & Safety Executive), responsible for enforcing the laws on employers liability, can fine businesses up to £2,500 per day. If a business fails to comply with the HSE they do have the authority to close the business down.
Once you have taken out cover the insurance provider will provide your business with a certificate – this certificate must be kept as a digital copy and be available for all employees to read. A copy of the document should be kept by the business for a minimum of 40 years and should be available to the HSE should they request to see it – failure to produce the document or have the certificate on show, can lead to a fine of up to £1000.
Employers Liability Insurance is ONLY valid in the United Kingdom and on offshore platforms in its waters. For employees based outside of the United Kingdom, you will have to check employment laws in those locations and take out the necessary cover required.
Larger organisations will undoubtedly require further insurance covers and lawyers, accountants and financial advisors must have Professional Indemnity Insurance by law.