If you’re providing counselling services from your home, you need to remember that you won’t be covered under your household insurance and will need to buy counselling insurance to protect you.
Business insurance is usually bought as a package. This package will usually include liability insurance and property insurance, and it may also contain a number of other covers.
This type of insurance covers you if a compensation claim is made against you because something you have done or failed to do has resulted in someone being injured or their property being damaged.
As well as covering the compensation award it also covers any additional costs and expenses such as the legal fees incurred in handling the claim. Your liability insurer will help you deal with any of the complex legal issues that can be involved when there is a compensation claim.
There are two types of liability insurance:
- Employer’s liability insurance
- Public liability insurance
Employer’s liability insurance covers compensation claims made by your employees. You’re legally required to have this type of insurance if you employ anyone, even if you are only employing them on a part-time or casual basis.
You can be fined up to £2,500 for each day that you do not have employer’s liability insurance. You are required to display a certificate of employer’s liability insurance and you can be fined up to £1,000 for failing to display the certificate.
This is similar to employer’s liability insurance but it covers compensation claims made by members of the public rather than claims made by your employees.
A standard public liability insurance policy covers compensation claims involving injury or damage but will not cover a claim where the claimant is claiming compensation for a purely economic loss and they haven’t been injured or had their property damage. It is important to make sure your public liability insurance policy contains a financial loss cover extension to address this issue.
The other limitation in standard public liability insurance policies is the fact that they do not cover compensation claims which arise as a result of professional activities. This could mean many of the claims that could be made against a home-based counsellor would not be insured. A medical malpractice cover extension provides cover for such claims.
Property insurance covers your business property against losses due to accidental damage or theft. Bear in mind that your business property will not be covered under your household insurance property.
It can be tempting to think that you don’t need this type of insurance because you don’t have much property to insure. However, it can be a surprise when you add up the value of all of the property. You should make sure you insure for the full value because otherwise you could be penalised if you need to make a claim.
If you are self-employed you will not get sick pay if you’re unable to work because you have been injured or you have fallen ill. This could mean that you will struggle to pay your monthly outgoings.
Personal accident and sickness insurance covers your lost income if you find yourself in this situation. It pays a weekly benefit to you while you are off work, or it pays a lump sum if you will be off work permanently.
You should also consider legal expenses insurance. This covers your legal costs if you find yourself involved in legal action and your legal expenses insurer will help you deal with the legal action.
A range of different types of legal action are covered, including:
- Contractual disputes
- Disputes with clients or neighbours
- Employment tribunals
- Tax/VAT inspections
- Criminal charges