The current lockdown in the UK has left many contractors with a reduced workload, and in some cases has temporarily forced them to stop working altogether, leading to uncertainty within the industry.
With this disruption leading to significantly reduced incomes for some and the need to manage spending more carefully, many questions around insurance might be raised. You might find yourself asking “If my business is closed, why do I need insurance?”, or “am I even covered if I continue to work during the pandemic?”.
However, it is unsurprising that whether you’re continuing to work or not, it is more important than ever that you maintain your contractors insurance, instead of exposing yourself to further risks.
In light of this, we have put together five reasons to maintain your contractors' insurance during lockdown:
1. To protect your tools, property and vehicles
Even if you are working reduced hours, or not at all during the lockdown period, it is vital that the stock, tools, premises and vehicles that you own are still insured. Even if your premises have been left unattended, or your tools are not in use, you will still be covered as long as you are following any recommendations issued by your insurer. In contrast, if you are not insured during this period then an incident such as a theft or vandalism, could cost your business more and lead to further disruption. This could also potentially delay your business’ ability to get back to normal once lockdown restrictions start to be eased.
2. To make sure you are covered for liability claims
Public liability insurance will protect you if a customer, or a third party such as a member of the public, makes a claim against your business. If you are still providing emergency services and are following the latest guidance issued by the government, your public liability insurance with Marsh Commercial will still be valid. Please check the latest advice for working safely during COVID-19 to ensure that you are following the guidance set by the government.1
3. Employers' liability insurance is still a legal requirement
As long as you continue to employ people, even if it is on a part-time basis, you are legally required to have employer’s liability insurance in place. This applies even if your employee are not working every day, and you could face fines of up to £2,500 per day that you do not have cover in place.2 As always, it is worth remembering that your employer’s liability insurance helps with things such as legal defence costs, and compensation in the event of an employee being injured or falling ill whilst at work.
4. You will not be covered for historical professional indemnity claims if you do not have cover in place
Professional indemnity insurance ensures that you are covered if a customer claims against your business alleging an error in your professional advice and services. It is important to remember that even if you are not currently carrying out work, your professional indemnity insurance keeps you covered if someone claims against work you did previously. Therefore, it is critical that you have professional indemnity cover in place at all times, as customers can claim regardless of when the work was undertaken. The legal fees and compensation costs that your business may have to issue in this scenario could have a potentially devastating impact on your business, and so it is vital that you have the correct cover in place.
5. Cost isn’t the barrier you might think it is
Whilst the thought of continuing to pay for insurance during these uncertain times might be unsettling, there are ways to cut and spread the cost. If your renewal is due then please let your usual advisor know, as you might be facing reduced risks due to current circumstances, such as a reduced workload or temporary closure. This could in turn affect your premium in the current climate.However, it is essential that you revisit your cover as the situation regarding lockdown and your state of work develops. Not doing so can lead to you being underinsured, which could lead to a claim not being paid out in part or full.
For further advice on how to help your business react and recover during the COVID-19 outbreak, please visit our Coronavirus Resource Centre, or read the latest articles related to COVID-19 below.