The struggling economy means that more and more people are turning to self-employment as a means to make a living. With a detailed and well executed business plan and an ambitious mind-set, there is a lot of money to be made in self-employment, but there are many preparatory measures you must take before launching into the business world. Business insurance is perhaps the most important measure of all.
There are three types of insurance that should have priority over all others:
(1) professional indemnity,
(2) employer’s liability and
(3) public liability insurance.
Taking out insurance should be one of your first steps towards setting up your own business; you will be setting yourself up for a potential financial disaster if you avoid or ignore insurance.
What kind of insurance do I need?
Every type of business is different, which means that every type of business needs a different type of insurance. If your business is designed to attract members of the public onto your premises, you will need public liability insurance to protect it against injuries and illnesses being sustained on those premises.
Employer’s liability insurance, as you may have guessed, protects your employees against injury and illness on the premises. If your business provides advice and services for a range of clients, you will need professional indemnity insurance to cover any financial losses that may have been experienced by a client as a result of advice or services from your business.
As with every type of insurance, these policies are only precautionary measures, but it really isn’t worth the trouble that could arise from running a business without the correct one. If a member of the public slipped and broke a wrist on your premises, launched a legal appeal for compensation and your business didn’t have public liability insurance, you would have to cover all of the costs involved from the start to the finish of the legal process. This could potentially finish your business off and land you in financial woe for a very long time.
Is it a legal requirement to have business insurance?
Not all types of insurance are required by law so it is your responsibility to decide whether or not you want to play it safe or take the risk. Some policies are, however, legally required to protect your business. If you employ other people within your business, you have to have employer’s liability insurance from day one to make sure that all potential legal costs are covered in the event of one of your employees getting injured or falling ill while at or as a result of work. Employer’s liability remains valid even if a former employee, many years down the line, decides to launch a claim against you because of an injury or illness they think they sustained while working for you. If you have insurance, all of the costs involved will be covered and your business will be safe.