Business insurance costs can be reclaimed through your business and are eligible for Corporation Tax relief.
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What are the disadvantages of contracting?
The disadvantages of contracting are:
- Uncertainty: Due to the flexible nature of their working relationships, contractors aren't guaranteed work after the end of assignment or project.
- Responsibility: Not only is it the responsibility of the contractor to find work, they are also responsible for their own finances.
- Employment rights: As a contractor, you generally wouldn't find yourself holding employment rights that permanent employees benefit from.
Can I expense Computer equipment?
Yes, you can claim the purchase of computers as a deductible expense.
Public liability insurance vs general liability insurance
Public liability insurance covers compensation claims made against your business by a third party for injury or damage. For example if a supplier trips on a trailing cable in your shop, or if you visit a client and spill coffee on their computer.
General liability insurance isn't available in the UK.
Self employed advisory fuel rates guide
Advisory fuel rates are recommended repayment amounts a company can use when reclaiming the fuel element on business mileage.
The rates are used to calculate:
- How much employers should reimburse employees for business travel using the company car
- How much employees need to repay employers for private travel using the company car
- The VAT you can claim back on business mileage using your personal vehicle
Do I need public liability insurance?
Public liability insurance isn't compulsory by law, but many businesses decide that they need it to protect themselves from crippling compensation costs, and also to satisfy the requirements of potential clients.
As it can protect you if you're sued by a member of the public, this insurance is particularly important if you interact with customers, suppliers or passersby in the course of your work.
Do I need business insurance?
Having business insurance ensures that you and your business are protected should the worst happens.
These policies can help cover the costs that arise due to property damage or liability claims-without which you'd have to pay for legal claims and damages out of your own pocket. The costs can add up to a significant amount-and can be financially devastating for self-employed workers and small business owners.
Errors and omissions vs professional indemnity
Errors and omissions insurance and professional indemnity insurance are different terms used to refer to the same insurance cover. 'Errors and omissions insurance' is more commonly used in the US, while the term 'professional indemnity insurance' is typically used in the UK.
Professional indemnity insurance is designed to protect you against legal liability for breach of professional duty while carrying out your business activities. For instance, if a client believes that your service is inadequate or if you've made a mistake, the insurance will cover you against claims the client makes against you.
Business Insurance Guide
- What is business insurance?
- Why do I need business insurance?
- Types of business insurance
- Professional indemnity insurance
- Public and product liability insurance
- Business contents insurance
- Employers liability insurance
- Cyber insurance
Can I get business insurance without a trade licence?
You can purchase business insurance before you obtain your trade licence. However, if you start trading without having the required licence, your policy may be deemed invalid.
Public liability claim examples
Public liability insurance claim examples:
1. Claims made against an electrician:
An electrician was engaged for the installation of a heating system in a commercial building. However, the installation was incorrectly done and caused a fire resulting in damages to the property, which amounted to £50,000. The electrician's insurance policy covered the cost of damage.
2. Claims made against a furniture assembler:
A cabinet that the furniture assembler had fitted fell from the wall, and caused injury to another contractor. The furniture assembler was required to pay just £250, as his insurance policy was able to cover the majority of the costs (£25,235).
Can I get public liability insurance with a criminal record?
Whether you can get public liability insurance with a criminal record depends on a number of things, including the details of your criminal convictions. Although some insurers won't provide insurance to anyone with a criminal record, some will provide it in certain circumstances.
What does business insurance cover?
Different types of business insurance cover different risks. Public liability insurance covers compensation claims made by a member of the public, while professional indemnity insurance covers you if you're sued by a client. Employers' liability insurance covers compensation claims from employees.