What insurance is compulsory in the UK?
If you work in the construction industry, you probably know that you need insurance. However, it can be challenging to understand what types of insurance you must have, and which are optional.
What insurance must I have?
There are two main types of insurance that are compulsory in the UK:
- employers’ liability insurance
- motor insurance
What is employers’ liability insurance?
It protects you and your business if a current or former employee suffers an injury or develops an illness as a result of working for you.
You are legally required to have employers’ liability insurance if you employ anyone. This includes:
- full- or part-time employees
- temporary staff
- apprentices
- volunteers
- people taking part in work experience or training schemes.
It may also include some sub-contractors you work with. If you are not sure, ask your insurance company.
What happens if I don’t have employers’ liability insurance?
You can be fined for every day that you do not have the right insurance. Being insured may also be a requirement in order to join a trade association, so not having insurance can indirectly have a negative effect on your business reputation.
Will the way my business is set up make a difference?
The rules relating to employers’ liability insurance are the same whether your business is set up as a limited company, a partnership, or if you are self-employed.
What about motor insurance?
If you drive a vehicle for work, you are required by law to at least have third-party insurance. This is to cover your liability for injury or damage to a third party or their property.
What are the penalties for not having motor insurance?
It’s illegal to drive on a road or in a public place without at least third-party insurance. Penalties include a fixed fine of £300 and 6 penalty points on your licence.
If the case goes to court, you could also receive an unlimited fine and be disqualified from driving. The police also have the power to seize and destroy the uninsured vehicle.
If an employee is driving your vehicle for work, you can still be penalised if you’re the registered keeper of the vehicle.
What other insurance do I need?
Although not compulsory, you should consider public liability insurance. This is designed to protect you and your business if something your business does injures a third party or damages their property.
You may find that larger clients and public sector organisations insist that you have public liability insurance as a part of your contract.
Depending on the nature of your business, you may also need professional indemnity insurance.
In addition to protecting you and your business from the consequences of a large claim, having the right insurance brings peace of mind and also helps establish you as a respectable and reputable business.
If you’re in any doubt about the insurance you need, speak to your insurance company.