If you’re just starting out in the world of business, congratulations. The road ahead might be tough at times, but you’ll reap so many benefits along the way.
If you’ve got your head screwed on, you might be wondering at what point you need to look into business insurance.
Nobody wants to pay for insurance they’re not using, but at the same time, the idea of going uninsured even for just a week or two is more than a little worrying.
Relax, Rhino is here to explain all.
The short answer is yes. Business insurance can be taken out before you have officially registered your business with HMRC and/ or Companies House.
If you’re a sole trader or entering a business partnership, you don’t actually need to register your business with Companies House and can simply register it with HMRC Self-Assessment to ensure you’re paying the correct tax going forward.
However, if you’re starting your own limited company, you’ll need to get it made official by Companies House before you start trading.
This being said, you can still get business insurance before you start trading regardless of the business structure you choose. Your insurer won’t need your company registration number or anything like that – just a few details including the business address and the name and type of your business.
Business insurance is there to help protect business owners and their families from the risks that all business owners face.
Going without business insurance won’t save you from the common costly pitfalls of business ownership, but it will protect you from their potentially devastating financial impact.
Think of business insurance like the seatbelt in your car – you hope you won’t need it, but if it comes to the crunch, it could stop you from losing everything.
There are a few different types of business insurance out there, but here are some of the key policies which will ensure you’re well-protected while running your business.
Public Liability Insurance – a key policy for any self-employed individual who deals with the public, PL insurance will cover you financially if a customer or member of the public brings a claim against you for personal injury or damages they incur as a result of your business.
Employer’s Liability Insurance – this is actually a legal requirement if you hire any staff in the course of your business. This includes apprentices or casual workers. So, although it's compulsory, it’s also extremely beneficial for you in case one of your employees sues you for injury or illness.
Professional Indemnity Insurance – if a client loses money due to negligent advice or work, you’re going to need PI insurance. This type of cover means you won’t have to pay them damages (and those pesky legal fees) out of your own pocket.
Personal Accident Insurance – a highly valuable insurance for tradesmen or anyone self-employed who faces risk in their job. This insurance covers you if you have an accident and are unable to work. You will get a lump sum to cover costs while you’re laid off and recovering, which you can use to cover mortgage, bills and other expenses until you’re fit to work again.
Income Protection Insurance – another great policy for tradesmen, income protection insurance can be taken out along with Personal Accident Insurance, or as a standalone policy. This insurance will pay out each month to help you cover expenses while you’re unable to work due to injury or sickness. As self-employed people don’t get sick pay, it’s an important policy to have in place.
Van Insurance – if you’re planning to use a van or other work vehicle for your business, your regular motor insurance policy won’t cut it. You’ll need a policy designed for commercial vehicle use, to make sure that if your van is damaged or in an accident, you’re able to make a claim.
Tools Insurance – if you’re a tradesperson or otherwise use tools in your job, it’s best to get them insured as soon as you start trading. Then, if your tools are stolen (which is unfortunately all-too-common in the UK), you can claim back the cost without any hassle. Tool loss is expensive and a major setback for a business just starting out, so it’s a good idea to protect them from day one.
We mentioned earlier that there are certain types of businesses which need a trade license in order to operate. You usually get these from the relevant local authority.
Businesses which are likely to need a trade license include:
There is a £1,000 penalty if you should have a trade license but operate without one. You don’t need a trade license in order to get your new business insured, though, so don’t let it be a barrier to you getting that important cover in place from the very beginning.
If you’re planning to start trading soon, the time is now.
We suggest you don’t go a single day’s operation without the proper business insurance in place. True, there will be a small outlay in initial cost which could put off some new business owners, but the risk of losing everything you’ve invested before you’ve even started is just too great.
Rhino can help. We’re the insurance experts of choice for self-employed contractors and tradespeople in the UK. We’ve helped thousands of customers with tradesmen insurance which is tailored to them, meaning they get exactly the coverage they need with none of the fluff.
Give the friendly team at Rhino a call today on 0116 243 7904 to find out more, or head to our quick quote engine to get a personalised quote in seconds.
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