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Can you run a business without business insurance?

Rhino Trade Insurance 20 February 2023

Business insurance. What is it? Do you need it? And most importantly, can you run a business without it?

Join Rhino as we delve into the world of business insurance to find the answers.


What is business insurance?

The term ‘business insurance’ doesn’t mean one single policy. Instead, it refers to several different policy types which are designed to help protect businesses from the various risks they face.

All businesses are different, so the types of insurance they need can vary. However, there are some core policy types which are recommended for anyone who is self-employed.

Generally speaking, business insurance will get you out of financial hot water should your business find itself on the hook for things like legal fees, medical bills and compensation-related expenses. These things can be very expensive yet are relatively common, especially in some industries, and most businesses can’t afford to pay out for these without insurance.

The main types of business insurance include:


Employer’s Liability Insurance

Employer’s Liability Insurance protects anyone who is self-employed and hires staff. The staff can be full-time employees, but it is also required for temporary helpers, apprentices, sub-contractors or just about any other type of hired worker.

If anything happens to one of your staff – from a broken toe to accidental death – your Employer’s Liability Insurance will kick in and shield you from the financial burden of the incident. The policy is there to cover things like medical bills, legal costs and compensation.

Is it required by law in the UK? Yes – every business which hires employees, even casual workers, must have this in place. You can be fined £2,500 per day for not having it in place, so it’s not something you ever want to go a day without if you’re a boss.


Public Liability Insurance

Public Liability Insurance is there for if (or when) a claim is brought against your business by a customer or a member of the public. The claim could be for an accident, injury or illness that they have experienced as a result of your business activities. 

Public Liability Insurance also covers you if a customer or member of the public has their property damaged or destroyed by you, or someone working for you. 

Much like Employer’s Liability Insurance, this type of insurance covers compensation and medical bills, as well as legal fees. Whether you’re a tradesperson, IT consultant, hairdresser or café owner – all self-employed people who come into contact with customers and the public need it.

Is it required by law in the UK? Surprisingly no, although Public Liability Insurance is a mandatory to work with most major clients from local councils, hospitals to contracting firms.


Professional Indemnity Insurance

Professional Indemnity Insurance covers you in case a client suffers financial loss as a result of your business, specifically arising from negligence in your advice, designs or general services. Should this happen, the policy will pay out to cover the cost of the client putting things right. 

Again, anyone self-employed can benefit from this type of policy if they offer any of these things. Tradespeople are definitely prime candidates, but so are other self-employed professionals from therapists to architects. 

Is it required by law in the UK? No, although for anyone self-employed who relies on delivering services to clients, it could be worth its weight in gold should something backfire.


Personal Accident Insurance

This type of business insurance will pay out a lump sum if you have an accident that leaves you unable to work for a length of time. Some industries, including almost all trades, have a high incidence of accidents, making this a smart policy to have in place as a tradesperson.

With Rhino’s industry-leading PA insurance, the accident doesn’t necessarily need to have taken place while working, and you can claim up to £50,000 to help with your recovery.

Is it required by law in the UK? No, but savvy business owners who want all bases covered can really benefit from this cover if something untoward happens that threatens your livelihood.


Income Protection Insurance

Income Protection Insurance is a must for anyone who runs a business which requires them to be there, in person, week in week out. This type of insurance is especially important if you’re also the breadwinner of your household. 

Essentially, this cover pays out a sum each month to keep everything ticking over if you find yourself sick, injured or otherwise unable to work for a period of time. 

Rhino’s policies offer up to £2,500 monthly with some of the lowest premiums around.

Is it required by law in the UK? No – although it could be the difference between you being able to meet your outgoings and not if you can’t work temporarily.


Work vehicle insurance

Some types of business rely heavily on their work vehicle to perform their job. If something happens to it – whether theft, damage or something else – you’re stuck and unable to make an income until you’re back on the road again.

This is why van insurance falls under the core suite of business insurance policies.

Is it required by law in the UK? The law requires your vehicle to be covered, but most domestic motor insurance policies don’t cover use of a vehicle for commercial purposes. This is why a good van insurance policy designed especially for your business type is advisable. 


Technology and gadget insurance

These days, most small businesses rely on technology to get the job done. Mobile phones, laptops, PDAs and other portable electronic devices are expensive and highly breakable. This is why a small business should have technology and gadget insurance in place – to protect them from the cost of having to replace them.

Is it required by law in the UK? No, because your phone taking a high dive from a second story scaffold or your PDA falling in a mug of tea isn’t the government’s problem, it’s yours. This is exactly why you should get them insured!


Can I do without business insurance?

No. Why? Let us explain. 

Mostly, business insurance is optional. With the exception of Employer’s Liability Insurance, none of them are legal requirements in the UK currently. However, you’ll find that many clients won’t work with a small business owner who doesn’t have good insurance coverage. This is especially true for tradesmen, as the high-risk nature of the job means they’re much more likely to need to make a claim.

Ultimately, running a business without insurance would be prohibitively expensive. Paying out of your own pocket for things like time off work sick, compensation for anyone who so much as stubs their toe near your working area and the cost of replacing things like tools and work vehicles would bankrupt even the most thriving business. This is the number one reason to get business insurance – and get it fast!

So, whether your business is as a sole trader, partnership or limited company, Rhino Trade Insurance is here to help get you covered against any eventuality. We offer award-winning tailored tradesmen insurance, some of the lowest premiums around and unrivalled customer service from our friendly, expert UK-based team.

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