What insurance do I need by law?
If you have employees, then you’re legally obliged to have employers’ liability insurance which covers you against any claims made by staff due to injury or illness through work. If you don’t have it, you could be fined up to £2,500 for every day you go without it.
It doesn’t matter if you’ve only got one staff member employed on a casual basis – as a general rule if you’re deducting National insurance and income tax as well as telling them what to do, where to do it and how long for – then you need employers’ liability insurance. You should be covered for at least £5 million but in reality most insurers will cover you for up to £10 million.
If you own vehicles in connection to your business, then you also need to have motor insurance by law. The minimum you can have is third party but if any of your vehicles were stolen or damaged by fire could you afford for it to be repaired or replaced out of your own expenses?
The only other legal requirement is if you run specific types of business such as a horse riding establishment – where you’ll need to have public liability insurance. If you’re in any doubt about your legal obligations or licence requirements, your local council will be able to help you. Of course any business that comes into contact with the public is advised to have public liability insurance as it’ll cover you for any claims against personal injury, loss or damage to property made by the public; but in most cases it’s not a legal necessity.
Your business is unique and the cover you need won’t be the same as someone else’s, that’s why most insurers will offer you packages where you can bolt on various types of cover. For example, if you’re an accountant or solicitor offering professional advice, you might consider professional indemnity insurance which will compensate clients for any losses made because of advice you gave them.