Self Employed Public Liability Insurance - Protecting Yourself Against Claims
Being self employed means that you are going to have to take certain precautions in order to safeguard your business. Taking out the appropriate public liability insurance will ensure that your business is covered for losses against a claim from a 3rd party.
What is Liability Insurance?
Public Liability Insurance will cover your business from claims made by the public or any other 3rd party. These claims can be the result of a product or service that you have supplied them and can also be made against your for things like injuries that occur on your premises. Unfortunately just about anybody can make a claim against you even if they have nothing to do with your business and what is even more unfortunate is that there are people that actively try to make claims for seemingly minor things that don’t need to be resolved legally.
Because we live in a litigation culture you would be taking an unnecessary risk by not taking out the appropriate cover. The vast majority of companies will have measures in place to protect themselves from the eventuality of a claim. These policies are being taken up by more and more small business owners and individuals to safeguard their assets because they realize that it may only take one accident injury claim to put them out of business.
How Much Does It Cost?
Fortunately for self employed people and sole traders the cost of small business liability insurance is relatively cheap. Many insurers will offer basic policies that can start from as little as $25 a month. The final cost will really depend on your type of business ad it is important to understand and clarify the following points with your insurer.
• What type of Business are you in? – Do you offer a Product or a Service? You may need other specialist types of insurance depending on what is involved in the course of your work.
• What type of equipment do you use? – How much it cost and what are the possible dangers in using it? e.g. the damage a Plumber or Electrician can cause are different from a Management Consultant or Freelance Designer.
• Where do you work? – Are you going to the client’s homes or offices are they coming to yours? There are even conditions if you meet in public places e.g. you are a personal trainer and work with your clients in the park.
• Are your working regularly or on a contract basis? There are insurance policies which are contract specific and may cover for other liability that is specific to that contract.
What Will Add to Your Premium
Although a basic liability insurance policy is quite cheap, there are particular conditions that will make it more expensive further to what has been mentioned above. Instances of Bankruptcy on your financial records will drive up the price of your insurance significantly. Any future insurer will regard you as more likely to make a significant claim owing to the negligence that led to you or your former business going bankrupt. The additional cost of insurance in this case can be up to 20%. Not all insurers will explicitly ask if you have been bankrupt and on the other extreme you may be refused completely.
A history of excessive claims will also raise your premium. Insurance companies will generally set their own benchmark as to how many claims in a year is considered normal. Should your previous claims appear more than incidental you will need to work harder to find a better price.
Is it Illegal not to have?
The simple answer is no. Depending on the local laws where your business is based you may not be required to have public liability insurance however, if you have registered yourself as a sole trader then there may be other mandatory types of insurance you need. Many self employed people use their own home or private vehicle for business use though they may be unknowingly voiding their personal cover if a claim is made against them while they are working. If this applies to you then often a quick phone is all it takes to extend your personal cover to include your own personal liability.
Where to Find Cheap Public Liability Insurance
The cheapest insurance will depend on why type of business that you are in. Many of the larger insurance companies will be cheaper if you are in an established trade. This is simply because they have more experience with the types of claims that are in your industry. In addition they will generally be resolved faster.
A specialist insurance company may be cheaper if you are in a more obscure trade that involves more peculiar risks to a third party. A specialist insurer in this case will be able to resolve matters more specific to your industry and minimise the payout amount to the affected party.
An injury to the member of the public or any other third party is bad enough in itself. Having the appropriate self employed public liability insurance will prevent one accident from being the catalyst that puts you out of business. Compare as many insurers as you can against each other when you have the appropriate details of your business on hand and you will be in a good position to negotiate a good price for the protection of your business.
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