East London Solicitors

EAST LONDON SOLICITORS SMALL BUSINESS FAQS

What types of business insurance may be needed for a business?

One way or another, you’re going to need some form of insurance for your business. There will be some policies you may choose purely for peace of mind, whereas others are a legal requirement. As always, seek advice from a business advisor such as your accountant or solicitor on your particular needs.

Here are the different kinds of insurances typically needed by small businesses.

Public liability

This is protection from third party claims caused by injury or death, or damage done to property as a direct result of business activities. This is a necessary insurance if any members of the public, clients or customers ever visit your business premises, however infrequent.

Public liability insurance should also include legal fees and expenses. This cover typically does not include claims made by your own staff. Many businesses are covered for up to £1 million. This is not as much as it sounds, particularly if you could have several simultaneous claims.

Employers’ liability

This only applies if you employ someone and covers claims arising from accidents or sickness, either on or off site. It applies only to employees. The norm is about £10millionof cover, and the minimum is £5million.The certificate of insurance must be displayed somewhere where all  employees can see it.

If you fail to get employers’ liability insurance where it is needed, the Health & Safety Executive can fine your business up to £2,500 per day.

Professional indemnity

This is really for businesses that deliver a professional service, such as accountancy or legal representation. It is a legal requirement for some professions such as solicitors or accountants, but for others, such as an IT consultancy, it is highly recommended for peace of mind. This Insurance protects your business from legal action for amongst other things, breach of contract, negligence.

Directors’ insurance

If you are the director of a limited company you are largely protected against claims. However, you could still be sued in certain situations, such as for negligence. This insurance protects you from such an eventuality.

Motor insurance

A legal requirement for all vehicles. If you use your own vehicle in the course of business, make sure your insurer is aware of this. Otherwise you may find a claim for an accident during work time may not be covered.

Legal expenses

If legal action is taken against your business, this will cover you for court costs and legal fees.

Important questions to consider before starting up a new business

• Motivation
• Business Structure
• Skills
• Funding
• Competition
• Marketplace
• Staff

Practical Tips to make sure you do business on your terms

• Ensure your Terms & Conditions are brought to your customer’s attention at the earliest opportunity. Consider setting out your terms in your brochures, catalogues or other marketing material, on your quotation forms and on your acknowledgement of order.
• Put your T&C’s on your invoices – if there is a course of dealing, this will assist your argument that your T&C’s had been brought to your customer’s attention over time.
• Train your sales staff in your procedures, ensure they have at least a basic working knowledge of the rules of contract formation (offer and acceptance) and the ‘battle of the forms’.