Business Insurance, Indemnity, Keyman etc advice

CreditCardJunkie

Hi there,

I run a very small limited company with just me. I provide marketing services and advice to small to medium sized businesses. Someone recently told me about indemnity insurance and keyman insurance.

It is a complete minefield to me. Any advice on where to start? 

Thanks!

tacpot12

You need to understand what are the key risks that the business faces, and what you can insure against. 

I doubt keyman insurance will be cost effective. You should certainly compare the cost of keyman insurance vs. life and critical health insurance for taken out personally. I would also say that Permanent Health Insurance would be a more important insurance to have once you have life insurance. Life insurance is usually only required if you have a mortgage or a family to support. 

You should look into professional liability insurance. This will cover you if you give someone some advice that turns out to be bad and they can sue you for the losses that you cause them.

Pretty much every business needs public liability insurance, if you visit or work on customer's sites, you are likely to benefit from having it if you cause anyone an injury or damage any property. 

CreditCardJunkie

tacpot12 said:

You need to understand what are the key risks that the business faces, and what you can insure against. 

I doubt keyman insurance will be cost effective. You should certainly compare the cost of keyman insurance vs. life and critical health insurance for taken out personally. I would also say that Permanent Health Insurance would be a more important insurance to have once you have life insurance. Life insurance is usually only required if you have a mortgage or a family to support. 

You should look into professional liability insurance. This will cover you if you give someone some advice that turns out to be bad and they can sue you for the losses that you cause them.

Pretty much every business needs public liability insurance, if you visit or work on customer's sites, you are likely to benefit from having it if you cause anyone an injury or damage any property. 

Thank you so much for your advice!

ComicGeek

You can get professional indemnity insurance for your type of work to cover mistakes/error you make - prices depend on turnover and the risk level of the work you do, we use Griffiths and Armour for ours https://www.griffithsandarmour.com/. We work in an industry where the cost of mistakes is high, and PI insurance was the first thing we sorted out when we set up the company. It's expensive, but it's a requirement for most work we do so just had to be built into operating costs.

I have a relevant life policy through the company to cover me - this would pay out a lump sum to my wife upon my death.  This has tax relief so doesn't cost the company very much, only about £40/month. I also have personal critical illness and life cover, and private health insurance provided by the company.

Sandtree

ComicGeek said:

I have a relevant life policy through the company to cover me - this would pay out a lump sum to my wife upon my death.  This has tax relief so doesn't cost the company very much

This is certainly useful whilst it still counts as a business expense, they keep talk about stopping that.

The one thing to think of though is if your company is your long term employment as if you decide to stop and go back to being an employee for someone else or your company folds then that policy is gone and now you're older life cover is much more expensive.