As a self employed person running your own business you face risks on a daily basis that are not encountered by those employed by others. Whether you are in fact a sole trader operating under your own name or in fact an employee of your own limited company, you are personally exposed to a wide range of legal liabilities that may fall upon you in the normal course of trading.
Liability Insurance for the Self Employed
For many individuals starting in new business, they’ll feel that the spectre of legal action against them just isn’t a realistic risk to their business and its success, but in this ever increasingly litigious society, where all and sundry is seeking somebody to blame, incidents do occur and when they do they can be very expensive to resolve.
As a business and as an individual you are responsible for the actions of yourself and your business and if you cause property damage or personal injuries to third parties, you may be sued in respect of your legal liability in respect of those injuries or damage.
Third party liability insurance or public liability insurance is the class of insurance that protects you against claims against you in respect of the legal liability to third parties in respect of personal injury and property damage.
The market for public liability insurance for the self employed is such a large and highly developed one that the expression self employed liability insurance is now used as if this were a separate class of insurance. In fact it isn’t, it is a public liability insurance policy albeit with a number of available options from various suppliers.
Even though public liability insurance is not a legal requirement for business owners in all but a very small number of trades and professions, it’s a vital business insurance protection that can avert financial ruin for the self employed.
Under the self employed public liability coverage you will need to choose a limit of indemnity; this amount is the insurance company’s maximum liability under the policy and customary limits in the United Kingdom are 1M, 2M and 5m although there are increasing calls for higher limits.
The limit your decide will very much depend on the trade you happen to be engaged in and any contractual requirements you might have placed upon you. Clearly the higher the limit, the more costly the policy will be although this is not a proportional increase. Commonly a 2M limit may be 20% more expensive than a 1M limit.
One of the key features of the policy is that it includes your legal defence expenses, which for many can be considered as a very powerful aspect of the cover. If someone makes an allegation against you regarding your possible responsibility for a potential loss, then your insurance company will respond and handle the defence of the claims – regardless of whether you are liable or not.
Legal defence expenditure is usually extremely costly, even if you are successful in your defence and may place your business and you in a hazardous financial situation.
One important aspect in the arrangement of your self employed liability insurance is to ensure that your business description under the contract is accurate and adequately conveys the business activities in which you might be engaged. it is for this business description that the insurer has accepted the responsibility under the coverage and work outside the normal understanding of that trade won’t be covered.
For most self employed business people the cost of adequate liability insurance protection is comparatively small and it’s a very cost effective way of managing the hazards for a business.
There are numerous companies involved in the provision of liability insurance and immediate quotations are available widely on the web. A specialist liability insurance agent will generally be able to offer you a range of quotes from insurance companies to satisfy your needs.
Blackfriars Group is a specialist liability insurance broker providing instant access to very competitive quotes and cover for public liability insurance for a wide range of trades and occupations for both established and start-up business. ask questions about insurance.
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