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Liability insurance

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Every year numerous minor changes are made to the rules of the road, and the legal obligations of car owners, which then mean the driving theory test and the practical test need to be updated. If you’re learning to drive, stay clued up on the rules by revising online – click here for a useful website.

This year the alterations include the SORN notification becoming valid until the car is sold, taxed or scrapped, and the tax disc being replaced by an electronic system, meaning you no longer need to display it on your windscreen.

The SORN notification is an interesting one – it used to be valid for only 12 months after which you would have to renew it, or the car would be considered in-use and you would need to have it insured. The reason why it’s important to register your vehicle as off-road when it’s not being used for a substantial length of time is that the government wants to clamp down on the problem of uninsured drivers, which are thought to cost the car industry around £500 million a year, and add £30 onto the cost of each standard insurance policy to boot.

In an effort to reduce this problem, the net is swung wide so that any car without insurance can be subject to a fine of up to £1,000, or potentially be destroyed. And even if you haven’t used your car in months, if it’s not registered as SORN, you could be caught up in that net.

Why you need insurance

The vast majority of cars in the UK are in use on a regular basis, usually daily for the commute or school-run. There are various legal obligations you need to comply with at all times, one of which is having at least 3rd party insurance to cover damage to any vehicle or property you may have a collision with. If you are caught driving without a valid insurance policy to drive that specific car then you can receive an automatic fine of up to £300 and 6 penalty points on your license, or even go to court over the matter.

That’s your first danger. Secondly of course, any damage to you or your vehicle is not covered either, and if you use your car for work, if you have a crash and you’re not covered, that could leave you in a very sticky situation.

Lies, lies and statistics

 

It’s thought that over 2 million British car insurance policies may actually be invalid because the holder has been less than truthful, or made a mistake, when applying. Apparently 60% of people do it because they want to save money on their premiums – an understandable motivation, especially if you’ve driven well for years, never made a big claim, but still see your premiums creeping ever higher, but it’s a false economy.

Because insurance companies are naturally going to check the details of a policy thoroughly in the event of a large claim, and if you said your car is parked off-road at night and it’s not, or you say you have an immobilizer fitted but you don’t, and it gets stolen or broken into, then you’re liable to get no pay out.

It’s common for people to invalidate their insurance completely unintentionally, and one of the easiest ways to make this slip is by not notifying your provider when you change address. Insurance policies are calculated using data from various sources, one of which is the area in which you live. So if you move from a quiet suburban area where car crime is minimal to somewhere much livelier, with busy roads, badly-lit parking areas and lots of incidents of theft, then of course the risks get much higher. Your policy and premiums must reflect this, and if the insurer is not aware of your move then it can consider any claim invalid and reject it.

Is your policy valid?

One of the easiest ways to check your car is insured is to enter your registration number into the Motor Insurance Database website at www.askMID.com, but you still need to check the details of your policy and ensure you’re compliant. Is your car taxed? Does it have a valid MOT? Are all the drivers on the policy and are all their personal details, including address and number of points on their licenses, correct? All of these things can play a role in whether your claim is accepted or rejected, so be sure to check your policy regularly.

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Tradesman liability insurance is something that every self-employed person must have by law. There are two main parts of this insurance: public liability insurance and employer’s liability insurance. If you are self employed but do not have any employees who work for you, then you don’t need the employer’s liability insurance. Public liability insurance, while not required by law, is highly recommended and will protect you from a number of problems.

What public liability insurance covers is any claims that could be made against you by a third party. For a construction worker, this might be someone walking past your site who trips over a tool and is badly injured. For someone working as a builder, plumber, electrician, or other trades that involve entering a client’s house, this will cover the accidental destruction of property in the owner’s house, whether or not it is caused directly by the work you are doing.

 

Employer’s liability insurance

 

Employer’s liability insurance, put simply, covers the possible injury or death of your employees in the event that you are sued for damages resulting in your negligence. This will typically cover the amount that the employee or their family is asking for as well as the associated legal expenses. This type of insurance is typically sold along with public liability insurance as the two go hand-in-hand.

There are many other types of insurance that a self-employed person will need to have or at least consider depending on the type of business you have. Contractors, builders, and other construction tradesmen will probably need contractor’s all risks insurance, which will cover everything from employee’s tools; the property on which the work is being done; and loss of materials, tools, and equipment due to theft or damage.

 

Personal insurance

 

Personal insurance is something that many people overlook, but it is extremely important for self-employed people, whether or not you have employees. Also called personal accident insurance, it will cover you as the owner if you are injured and not able to work for a period of time. It will provide you with a monthly tax-free income during the time you are unable to work, hospital cash that goes toward covering hospital bills, and may include a lump sum payout depending on the injury. This is another type of insurance that is highly recommended for construction worker, but is useful for any person who is self-employed, including hairdressers and beauticians.

For those in the construction industry or those who use expensive machinery and tools, you may want machinery and tool insurance. In the construction industry in particular, there are a lot of chances for theft, accident, damage, and injury to occur as a result of the heavy machinery being used. This insurance will also typically cover damages caused by third parties.

When selecting the types of insurance needed for your specific trade, take your time and do your research. Check first to see which types of insurance are required by law, and which ones you think you will really need. It’s important also to measure the cost of the insurance against the risk of not having it. It is always better to have more coverage that you think you might need, even though if you are just starting out it may be financially difficult to have insurance.

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