Do I need insurance?
Put simply – YES!
Insurance gives you the peace of mind to just get on with the job of earning money. It protects you against those unexpected things that could derail your business. We cover insurance in a separate course but for now these are the types of cover that you should be aware of.
Liability and Indemnity Cover
This is liability cover if your work fails to meet the standards expected by your customer and they seek damages.
This form of cover can replace or compensate for the loss or breakage of your equipment needed to conduct your business.
Normal vehicle insurance is unlikely to cover your business use as it usually only covers commuting to one, or more, places of work and only then not under the most common cover – social, domestic and pleasure.
Commuting is the next form of private cover and includes everything in Social, Domestic and Pleasure, and adds driving to and from a permanent place of work. Driving your car to the train station and leaving it there, giving someone a lift to their place of work both also count as commuting; it’s best to check when you get your quote.
Whether you plan to use your private vehicle or a business specific vehicle, you have to insure your vehicle for Class 1, Class 2 or Class 3 business use or full commercial.
- Class 1 Business Use: Using your car as part of your job, to drive to other sites as well as your usual place of work but not including commercial use (such as deliveries) or door-to-door selling. Usually your spouse will also be covered but no other named driver.
- Class 2 Business Use: Like Class 1, but it generally covers you (the policyholder) and a named driver, in connection with your business so including deliveries. However, check with the policy underwriters when you get a quote as each have their own rules about covers.
- Class 3 – Business Use: If you are a sales person or carrying samples and racking up the miles.
- Commercial Use: Anything else is probably Commercial insurance and, certainly, for examples using your car as a taxi or minicab or driving a limo, or using your car to give paid driving lessons.
You may want to consider loss of earnings or critical illness cover as a self-employed person. In addition, payment protection insurance for your mortgage is worth considering – despite the recent media and legal activity about the product because some people were sold it when they didn’t need the cover.
We will be able to help you with specific areas of cover or a package of cover for your business. See our insurance offerings online.
Failure and continuity insurance
Some companies can provide business continuity and failure policies. These will protect you and your customers if your company fails while your still completing customer orders or if you have to delay delivery for a supplier failure for example.