Welp MagazineInsurance can be an intimidating task to tackle! There are an array of policy types, insurers and policy benefits so understanding where to start can be difficult.
POLICY TYPE
The BIID consider three policies to be essential for a successful interior design business: Professional Indemnity insurance, Public Liability and Employers’ Liability.
- WHAT IS PROFESSIONAL INDEMNITY INSURANCE?
Professional Indemnity insurance protects against claims for financial loss, made against designers, because of negligence. For example, if a client made a claim against you and it was decided by a court, based on the decision of the court that you had not done everything you could have to prevent a claim being made, then you might have to pay the client the amount of the claim.
- WHAT IS PUBLIC LIABILITY INSURANCE?
Public Liability insurance protects against claims of injury, made against designers, if someone is injured because of actions of designers while they are carrying out their business. For example, if a client made a claim against you and it was decided by a court, based upon the decision of the court that the interior designer had not taken the necessary security precautions and as a result of an accident, they broke their arm, then you might have to pay the client the amount of the claim.
- WHAT IS EMPLOYERS’ LIABILITY INSURANCE?
Employers’ Liability insurance protects an employer against claims of injury made against them by employees or ex-employees, for which the employer may be held legally responsible e.g. stress related illness. Often, the employer is legally liable for damage or injury caused by them. For example, a cabinet maker working as a self-employed makes a claim against their employer for stress related illness. It is proved that the employer’s working practices were a contributory cause of illness and the employee is awarded damages. The employer does not have Employers’ Liability insurance. The employer will have to pay the claim, they could possibly become insolvent, and the employee could receive no help with their recovery. Without Employers’ Liability insurance, an employer may face a claim for damages, which could have long term effects upon the business.
Benefits of Insurance for Interior Designers?
• By having insurance you take control of risk
• Insurance provides cover for professional indemnity upto £5 million
• It protects you if you are sued
• It provides cover for the working practice of the business
• Offers wide ranging public liability cover
• It offers protection of health
• Gives peace of mind for you and your employees
• It can potentially save your life
• It allows you to make claims on it to protect your business and assets
• It provides security for your future years
• It helps you to pay less tax
• Provides valuable support for you after a claim, such as legal advice
What type of claims does Public Liability cover?
• Lawsuits brought about by clients against the designer.
• Law suits brought about by customers injuring themselves and blaming the designer.
• Lawsuits brought about by customers suing the designer for the losses they have incurred.
• Law suits brought about by employees of the designer suing them for dismissing them, or for not paying their wages.
• Lawsuits brought about by employees of the designer suing them for not keeping their promises as they should have.
• Law suits brought about by the designer against employees.
• Law suits brought about by the designer against customers.
• Lawsuits brought about by the designer against other people, who are causing damage or injury, or even death to the designer.
How would the Designer pay a Public Liability Claim?
• The Professional Indemnity policy also covers the designer against Public Liability Claims. This makes it easier for the designer if a Public Liability Claim is made against them.
• The Designer may be entitled to Employers’ Liability cover.
• The designer may have to pay the settlement amount of the Public Liability. But the Public Liability insurer covers the designer for the settlement amount.
• The designer may be able to claim any costs of repairing damage made by the Public Liability against the designer, if they have to pay the settlement amount. The Public Liability insurer covers the designer against any costs of damage.
• The designer may have to pay a Public Liability Claim where there is no Employers Liability cover. The Public Liability insurer will cover this situation.
• The Public Liability insurer will release the design firm from the Public Liability claim if they pay the amount.
• The Public Liability insurer will cover Court costs involved with Public Liability cases.
• The Public Liability insurer will cover the designer against the costs of defending Public Liability claims, if they hire their own solicitor.
In a situation where the designer has no Employers Liability cover, the Public Liability will pay for the designer to cover the legal fees for defending a Public Liability claim. This is important because if the designer did not pay their legal fees, they could risk being charged with a criminal offence for not having Employers Liability cover. The designer could be fined or sent to jail for a period of time, for this, depending on the seriousness of the offence.
There is a Criminal offence for not paying legal fees involved with defending Employers Liability or Public Liability claims.
The Criminal offence of Failure to Obtain Employers Limitation is committed if the responsible person fails to take out or keep in force Employers Liability Insurance to cover any proceedings, which could be brought against him in respect of actions in the work place. Serious cases could lead to fines and imprisonment.
How much does Public Liability cover cost?
Private Individual Public Liability Insurance can cost between £20 and £50 per year.
Commercial Premises Public Liability Insurance can include costs of between £250 and £500, depending on the amount you cover. It depends on the amount of risk to the public you face when you go to work.
What types of insurance does the policy provide?
• The policy provides full peace of mind that you are adequately insured.
• The policy provide cover for faults in workmanship.
• The policy offers cover from injury to workers in the work place.
• The policy offers cover for injury to subcontractors in the work place.
• The policy offers cover for loss of income through injuries in the workplace.
• The policy provides cover for employees in the work place.
• The policy provides cover for people who enter your premises with the permission of your employees.
• The policy provides cover for people who enter your premises without the permission of your employees.
• The policy provides cover for loss of life.
• The policy provides cover for slander.
• The policy provides cover for financial damage.
• The policy provides cover for loss of inheritance.
• The policy provides cover for loss of production.
• The policy provides cover for claims, which are rejected.
• The policy provides cover for dismissal of employees.
• The policy provides cover for a breach of contract.
• The policy provides cover for a Financial Claim, from the public.
• The policy provides cover for a Revenue Claim from the public.
• The policy provides cover for a claim for damage to property.
• The policy provides cover for a report by an expert witness.
• The policy provides cover for an error in judgment.
• The policy provides cover in respect of employees in the work place.
How does the policy effect me personally?
The policy covers your business and protects some of your personal assets.
• The policy covers your family and dependants.
• The policy covers your home and contents.
• The policy covers your vehicles.
• The policy covers your business.
Questions to ask before buying Insurance for Interior Designers
Use the questions below as a rough guide to your needs.
- Why are you taking out this insurance?
This is the least important question and the most important question to ask, to get your own answers to the bigger identification of your needs. Although your needs may take a lifetime for you to discover and solve, everyone you may ask how and why to buy this insurance will be waiting for you to be down to business. This is your business so enjoy the rest of the questions and get your answers. Then ask yourself if you have covered all the parts of your needs & reasons properly.
- Will you be liable for any of the following;
• Loss of earnings.
• Damage to property.
• Personal injuries.
• Criminal injuries.
• Loss of clients.
• Loss of Production.
• Commercial loss through industrial action.
• Loss of business.
• Loss of business profits.
• Financial loss.
• Slander.
• Civil disputes.
• Insurance for the business.
• Commercial premises insurance.
- What is the amount of cover you need?
This is where you tell your insurer how much cover you need. Your insurance needs depend on the amount & value of your business & it’s assets, your staff, your premises, your operating costs & your clients. You may not need any quotes, but you may need a few. When it comes to the time to get quotes remember as much of the 3 areas in the following list as possible.
- Are you and any of your staff:
• Uninsured.
• Underinsured.
• Excluded from cover.
• Excluded from cover.
• Can be insured through:
• One account.
• Several insurances.
• Insurance for contractors & subcontractors.
- Are you insured against all the things that you do?
This would be another insurance question. But if you take out an insurance to cover your business but you are insured in other ways, for the same area’s of your business, consider how much you are paying in premiums? Is it a lot? Will it be worth the trouble to cancel the insurance that duplicates itself? Thinking about it will depend on how much you are paying, but i can show you that the amount of money you pay, could mean you can afford another section of insurance, all on your own.
- Are you taking out an insurance, which covers your business properly?
This is a pleading to the insurer to educate you on the reasons why you should buy the policy.
- Are you wondering if your business is too new or too small to have Insurance?
This is a pleading to the insurer to educate you on the reasons why you should buy the policy.
- Why is the policy important?
This is where you would ask if you should insure your business or not. But if you ask the question then you have to wait for the answer, so put that to the diary for later. If you have lots of questions in your head then ask yourself this question and the answer will come. If you don’t ask the question, you will never get the answer.
- Is the value of the sections of the business, worth the cost of the policy?
This is where you ask yourself if the value of your business is worth the cost of the policy? You can always change, but this is an important question to ask yourself. The cost of the policy will be worked out on the growth of your business, everything you have done and all the things you want to do? You will be paying for this, so don’t you want to know if you are paying the right price? At the end of the day you will be paying so you can ask the question.
- How risky is your business to insure?
This is where you tell the prospective insurer how to value your business, to access its risk, which could be anything from £50,000. If you can do it your way your cost to insure, could be reduced, if not you could be paying for the common risks in your business.
