Business insurance for company and sole employee

[Twentyfour7]

Hi All

I have asked my broker to provide insurance for both my business and myself. On the policy it states the insured is : "(my name) trading as (x the business name)"

I am concerned as I feel that the policy schedule should refer to the two entities separately ie 1. the Business Ltd and 2.My name as an "additional insured" stating I am covered under the same basis as the insured - ie the business

Have I got it wrong? Am I as an individual and the business covered equally and separately under the term :"(my name) trading as (x the business name)"

Thanks for your advice

Twentyfourseven

[KevinCamaroSS]

If your business is a limited company why would you need personal insurance as well?

[Twentyfour7]

Because as an individual you can still be sued

[Simpo Two]

You and the company are two separate entities - that is often the point of incorporating. Seems to me the policy you've seen is for a sole trader.

Two questions come to mind:

1) How likely are you to be sued? I used to worry about this, until I realised I was actually quite good at my job.

2) Do you really need a limited company?

[Insurancejon]

IF you trade as both a sole trader AND a Ltd co, some insurers will allow you to have the policy issued as Joe blogs t/a xzy and/or xzy ltd.

However many say they are two separate entities, and some insures quite rightly say get two separate policies

IF you DONT trade as a sole trader as well as a Ltd company you are just misguided and should just get a policy in the name of your Ltd co, as you are in fact removing the main benefit of incorporation

[Jockman]

What if you have a holding company?

[Twentyfour7]

I'm afraid I am confused. I am the director of my company and a medical practitioner. My business and I could be sued. Before with another broker I was added to the insured business policy as "additional insureds"

[Jockman]

Can’t you just take out normal business insurance and supplement it with D&O insurance?

Along with a stand alone legal policy that’s what we do.

[Eric Mc]

Twentyfour7 said:

I'm afraid I am confused. I am the director of my company and a medical practitioner. My business and I could be sued. Before with another broker I was added to the insured business policy as "additional insureds"

Simpo is correct in that the legal basis behind a "limited liability" company is the fact that the business is treated as a separate legal entity to its proprietor (shareholders/director). In theory therefore, it would only be the company itself which would need to take out insurance to cover risks associated with its business activities.

However, the world is a bit more complex than this. The law now recognises that, in certain businesses, there is a dominant "controlling mind" at work. This is particularly the case when it comes to "one man band" companies where there is really only one person directing the course of the business.

In these cases, if things go wrong for the company, a director/shareholder can find themselves personally exposed to financial liability if it comes to the matter of compensation or a financial settlement.

In those cases, it would be advisable for the individual main shareholder/director to see what personal protection might be appropriate over and above the normal business insurance.

[Insurancejon]

Eric Mc said:

Twentyfour7 said:

I'm afraid I am confused. I am the director of my company and a medical practitioner. My business and I could be sued. Before with another broker I was added to the insured business policy as "additional insureds"

Simpo is correct in that the legal basis behind a "limited liability" company is the fact that the business is treated as a separate legal entity to its proprietor (shareholders/director). In theory therefore, it would only be the company itself which would need to take out insurance to cover risks associated with its business activities.

However, the world is a bit more complex than this. The law now recognises that, in certain businesses, there is a dominant "controlling mind" at work. This is particularly the case when it comes to "one man band" companies where there is really only one person directing the course of the business.

In these cases, if things go wrong for the company, a director/shareholder can find themselves personally exposed to financial liability if it comes to the matter of compensation or a financial settlement.

In those cases, it would be advisable for the individual main shareholder/director to see what personal protection might be appropriate over and above the normal business insurance.

that last sentence is why there is Directors and Officers Insurance (now call management liability insurance).

with regards to the additional insureds. Its not up to your broker, its as simple as some insurers will, and some wont. the correct way of doing it is to not.

[Simpo Two]

Twentyfour7 said:

I'm afraid I am confused. I am the director of my company and a medical practitioner. My business and I could be sued. Before with another broker I was added to the insured business policy as "additional insureds"

Do you know other such 'medical practitioners' you could ask to find out how they get over the problem? Is your former broker stil extant?

[Ascayman]

You need a D&O policy for yourself.