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What’s the difference between long-term and temporary vehicle insurance and which one is best for you?

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If you run your own business, then you’ll no doubt know just how challenging it can be to keep on top of your finances. Whether you’re in the early days of your venture or you’ve been established for a number of years, bills can quickly add up and eat into overheads.

One business cost that is often unavoidable is insurance. Of course, you want to make sure that your business is fully-insured and covered should anything go wrong, but you also don’t want to spend hundreds of pounds on a policy that you may not need for the entire year.

It’s a common dilemma for both business owners and individuals without a permanent car – do you splash out on a long-term policy that covers your vehicle for the entire year, or do you opt for temporary vehicle insurance every time you want to drive a new vehicle? Both have positives and downfalls, and in this article, we’ll attempt to unravel which is the best option for you.

Why take out insurance?

In the United Kingdom, you cannot drive a vehicle without a valid insurance policy, both as an individual and as a business owner. As a legal minimum, you should have third-party insurance, which means you’ll be covered if you have an accident and cause damage to another person, vehicle, animal or property.

Third-party insurance, however, does not cover any other costs, such as the cost of repairing your own vehicle, or the cost of your recovery. That’s why it is recommended to take out a fully-comprehensive policy – even if you want to save money, it pays to be protected against unfortunate accidents and incidences and could save you in the long-run.

Vehicle insurance also covers lawsuits and legal fees which could be brought against you when you are involved in an accident, and it can cover other incidences such as fire and theft, should you take out a comprehensive plan. As a business owner, this is important – people are more likely to claim against a business than they are an individual.

What are the benefits of temporary insurance?

Temporary car insurance, like the policies offered by companies such as Call Wiser, have been on the increase in recent years, with frugal business owners and individuals looking to save money and get more bang for their buck. If you’re a freelancer, only hire vehicles on an occasional basis, or don’t have a permanent vehicle and instead borrow from friends and family, then there’s no point in you splashing out in an expensive coverage policy.

  • Flexibility of dates: If you’re planning on making a long journey but don’t have an exact date in mind, then you’ll likely invest in a car insurance policy that covers you for an extended period. This isn’t always the most cost-effective option, as you’ll essentially be paying for coverage on days you won’t need it. That’s why temporary insurance is the cheapest and most cost-effective option, as you’ll be able to cover your vehicle for the exact dates and times – no wastage or unnecessary insurance.
  • Flexibility of vehicles: Not sure which vehicle you’ll be driving on the day of your journey? Planning on picking up a hire car on the day of your travel? That’s another significant benefit to temporary insurance. Of course, if you want to, you can splash out on comprehensive “drive any car” insurance policies, but these are expensive.
  • Instant coverage: Need to deliver a parcel overnight or head into town to visit a relative? Temporary car insurance makes that possible, as you’ll be able to get instant coverage for your vehicle. Don’t let long, drawn-out car insurance policies stop you from doing what you want to do – just go for a temporary plan.
  • Add additional drivers: Want to take it in turns to drive the car into the city? With temporary car insurance, you can add additional drivers to your plan, often for free, to save you time and headache. Always check the small print of your policy to make sure that this option is available for you, as you may have to pay extra to upgrade.

What are the drawbacks of temporary insurance?

  • More expensive: Because of the convenience of temporary car insurance, you can expect to pay more for your policy in the long-term than you would by taking out a long-term plan. Add up the costs and see which is the cheapest for your needs.
  • Have to set up every time: If you’re always on the road and need to get from A to B as soon as possible, then having to sign up for a new temporary car insurance policy every time can be a challenge. Many providers have apps and one-page sign-ups to make purchasing a plan easier, but it’s still a hassle when you’re leading a busy life.
  • Not tied down to any plan: Because you’re not tied down to a particular plan or policy, it’s easy to get confused over what you’re covered for. Make sure you read the terms and conditions of your policy every time you sign up – things change from provider to provider, and you won’t always be covered for things like windscreen chips or wheel replacement if you’re taking out a “cheap” temporary policy.
  • Short dated: Typically, that’s the whole point of temporary car insurance policies, but this can be a downside if your trip is extended or you want to drive for longer periods of time. Of course, you can contact the insurance provider to have your policy upgraded or extended, but this isn’t the most cost-effective option.

What are the benefits of long-term insurance?

  • Permanent cover: When you take out a long-term car insurance policy, you’ll be covered throughout the length of your policy. Plus, most car insurance policies will automatically renew unless you cancel so that you won’t go without cover.
  • Easy to customise: Made customisations to your vehicle or want to add a second driver midway through your policy? Most insurers make it easy to customise your policy mid-period; simply get in touch and ask for assistance.

What are the drawbacks of long-term insurance?

  • Locked in: Unless you have a flexible policy, you’ll be locked-in to your car insurance provider for the length of your period. Of course, you can sign up for another policy at any time, but you’ll still be liable to pay for your original car insurance policy.
  • No refund: Most insurers don’t offer refunds on insurance periods that you don’t use. Whether you only drive at certain times of the year or decide to stop driving altogether, you’ll be paying for a policy you no longer want or need.
  • Limited to one vehicle: Unless you take out a fully comprehensive plan, you’ll only be covered to drive one vehicle. Adding additional vehicles can be expensive. 

Overview

Both temporary and permanent car insurance policies have their uses, and it’s up to you to determine which is best for your requirements and budgets. If you need to be insured on a regular basis, or you’re taking out temporary policies more than three or four times a year, then long-term car insurance may be the most cost-effective option. Happy driving!

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Insurance

What Is the Purpose of Key Person Life Insurance?

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As the owner of a business who is currently strategically planning, or thinking about beginning with this process, then you can be considering getting key-person life insurance, which is even known as the key-man type of insurance.

This insurance ensures coverage to the most vital person in the company. This policy works similar to that of life insurance as it protects your family financially after your demise. The key person life insurance policy as compared to life insurance of the personal type mainly protects your business.

What is a key person life insurance?

If the owner or any other significant employee of a particular company dies, the key-person life insurance will bring a death benefit to the business. If the reputation and the financial status of your company are closely associated with the name of a particular person, his skill set or reputation, you need to have critical person insurance to make sure that your company is not financially affected if he passes away.

This type of insurance is also useful for partnerships. When one of the two dies, the second person can buy shares of the one who has passed away. This insurance lets the business continue to run smoothly when the executive is looking for a replacement to take over or is implementing other strategies.

How does the key-person life insurance work?

The company ensures life insurance policy for its vital employees will pay for the premiums and will act in the position of a beneficiary for all these policies. It receives a payoff if the key person passes away which can be utilized to pay for various expenses, like getting a replacement, paying off debts and investors, or paying a pittance to the workers if the company dissolves.

What kind of person is the key person insurance for?

Looking closely at the structure of your business and your co-workers may help you decide if you need key person insurance. You may consider someone else apart from you as the key person in the company. If you’re the sole proprietor, you don’t require this insurance.

How much coverage should you purchase?

The coverage your business needs depends on factors like what effect would the death of the person has on your company financially. If you are the sole proprietor, you need to calculate how much coverage your descendants would need financially.

What are the insurance policy exclusions?

Before investing in the policy, read carefully what all it covers. You need to keep in mind that your claim can be rejected if you meet any exclusion. The most common exclusions include fraud of any kind, intentional dishonesty, or suicide within the contestability period, that is, if the person commits suicide within two years after the life insurance policy has been taken.

What is the purpose of key person insurance?

To make sure that your company is continued even after your demise and is not forced to be closed, you need a key person life insurance. Additionally, this insurance helps in sustaining your family after you pass away.

How to apply for key person insurance?

As this insurance is customizable, you need to check the coverage limits and read all the terms carefully. By increasing your premium a little, you can get an increase within your coverage too. Settling for the cheapest policy isn’t a wise thing to do. Renewing the policy later may end you up with paying more as the person will be older.

You need to keep in mind that your coverage limits alter as your business grows. You need to increase the value of the key person accordingly. If you don’t grow and change your policies accordingly, your family will not receive as much money as they might need.

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Insurance

Why Your Taxi Business Should Consider Going Green

London

The state of the environment is a much talked-about topic across all industries and markets, including the taxi and transportation industries. Unfortunately, cars and other vehicles are one of the primary villains regarding carbon emissions. However, taxi companies provide a valuable and vital service for so many people on daily basis, not to mention pumping money into local economies as well.

Adapting the way your run your taxi business now can have a huge impact on your success as rules, regulations, and public awareness err on the side of environmental caution.

Here, we’ll take a look at how your business can go green and the steps you can take to provide a safer environment, both financially and in terms of the world around you.

What Does Going Green Actually Mean for You?

‘Going green’ is a bit of a buzzword at the moment, with all sorts of industries capitalising on their consumers desire to be more ‘woke’ to the issues that are affecting us and the generation coming next. This is no different for taxis. Car companies have put billions into developing both hybrid and electronic vehicles that emit less carbon into the atmosphere, helping reduce the footprint they make.

Unfortunately, due to the nature of the business, taxis are obviously on the road all day and all night. Figures from a report published by the Low Carbon Vehicle Partnership and Energy Saving Trust show that private hire taxi vehicles contribute negatively to air quality, and as a result the health of the public and the drivers themselves. In central London in 2013, for example, up to 18% of nitrogen oxide emissions come from taxis. The report also states that air pollution is still the number one environmental cause of preventable illness and dead in the UK – a shocking statistic.

So, what does this mean for you? You’ve likely spent years building up a taxi fleet and might be reluctant to scrap all your diesel vehicles for costly new hybrid or electric cars.

The government’s The Road to Zero strategy is aimed at setting targets for the reduction or diesel and petrol car sales in the UK, starting with at least a 50% reduction by 2030 and an all out ban by 2040. This, as well as the potential for new emission regulations, means that futureproofing your business today will pay off in the long-term.

How Do You Start Your Path to a Greener Business?

If you are a taxi fleet owner in London, you will already have seen that new regulations came into force on the 1st January 2018. All newly-registered taxis have to be capable of zero-emission with any CO2 emissions emitted being below 50g/km.

Deciding to either adapt your taxi business for new green measures or set up a new taxi business with an eco-friendly fleet is the first step. Once you’ve made that choice, you need to start thinking of all the environmental risks your business presents and how you can mitigate them.

Obviously, you must start with the vehicles themselves. There are schemes in place to help alleviate the financial costs of going green, such as Transport for London’s £5000 grant for taxi drivers who delicense their current vehicle to buy a new hybrid or electronic one.

There are many acronyms out there pertaining eco-friendly vehicles, so let’s dive in and define them:

  • ULEV: Ultra-Low Emission Vehicle
    This is a car that produces less than 75g of carbon monoxide per kilometre and can drive for ten miles without emitting any carbon monoxide at all
  • EV: Electric Vehicle
    This refers to fully-electric cars that are powered by battery which is charged using charge points (including all Tesla cars, the Nissan Leaf, and the Kia Soul EV, among others)
  • Hybrids
    These are cars that have smaller batteries than EVs that are charged through coasting and braking, meaning they have far shorter electric ranges
  • PHEV: Plug-In Hybrid
    These are closer to ULEVs than standard hybrids because they have larger batteries and can use electric power for longer due to being charged at chargepoints
  • FCEV: Fuel Cell Electric Vehicle
    These cars use hydrogen and oxygen to create an electric current. They don’t release any emission from the exhaust pipe because they are simply powered by heat and water. These are much less widely-used than the other types of we’ve mentioned because charging points are scarce.

With so much to choose from, all offering very different eco-friendly elements and at varying prices, it can be hard to even know where to start when it comes to upgrading your fleet.

One of the main things you will likely consider as a business owner is the cost. Luckily, because there is so much attention being placed on this category in recent years, the government has set up a multitude of schemes and grants to help taxi business owners conform to the new regulations put in place.

Alongside the £5000 grant mentioned above, there are several other schemes to consider, including:

  • OLEV funding for taxi charging: funding for local authorities to set up a charging structure for ultra-low emission taxis
  • Plug-in taxi grant: a grant for eligible plug-in vehicles that is deducted from the retail price when taxi companies by new vehicles
  • EV Homecharge Scheme (EVHS): a grant for up to 75% of the cost of installing a chargepoint for the registered primary user of an electric vehicle
  • VED rates/Fuel duty: all taxis that are entitled to the plug-in taxi grant are exempt from vehicle excise duty if the vehicle is over £40,000. Similarly, electric and hydrogen vehicles will not have to pay fuel duty

What About Insurance for Eco-Friendly Taxis?

Insuring your eco-friendly fleet might be a bit more expensive than a petrol or diesel fleet. This is for a number of reasons, but the main issue is that these low emission vehicles present a slightly higher risk than other cars.

This is not through any driver fault; it is simply because they are usually more expensive which means they will cost more to repair in the event of an accident. Most taxi insurance brokers will, however, try their best to find a competitive quote for comprehensive cover. Having said this, as these types of taxi becomes more prevalent on UK roads, places that can repair them will themselves become more ubiquitous, which will bring prices down considerably.

Taxi insurance brokers can also help offer some advice on how to mitigate these costs with some tips and tricks to reduce the cost of your premium. You could employ telematics in your taxis, which is black box technology that tracks the way your drivers use their vehicles. The safer they drive, the less they will pay because the broker sees they present less of a risk on average.

The best option for taxi insurance is to shop around. It might be tempting to get the bare legal minimum of motor insurance, which is third party only (TPO), however this will not adequately protect you from the costs that can accrue in the event of a claim. Look around and make comparisons where you can, this will help you in the long-term.

Summary

There are many options out there for making your taxi company greener and therefore better for the world around you. Preparation and research are key to making a relatively simple transition. With so much help available from the government and local authorities, not to mention the number of regulations quickly being put in place, you can afford to work out a greener way of running your business, without losing out on valuable revenue.

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Insurance

What Insurance Do I Need For My New Business?

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Every business owner needs some form of insurance. Think of insurance policies as safety nets that you can land on if you slip off the business ladder. There’s a lot that can go wrong when running your company and the recovery could cost you a fortune. Everything from theft to a lawsuit is a possibility that you may need to consider. With the right insurance policy in place, you can soften the blow of any financial issue.

You also need to understand that some forms of insurance are not optional. Small businesses are legally required to have certain insurance policies in place to protect the business, their employees, and the general public. Here are some of the insurance policies that you need to have in place before your new company opens on the market.

General Liability

General liability protects you if your business injures another individual or causes damage to property. With general liability, you can make sure you are covered with a defense and if you need to pay damages. As such, it is crucial for any and all business owners, whether working from home, a factory or in an office. There are lots of instances where general liability insurance could come into play. For instance, a member of the general public might be injured on your property due to tripping over a wire in your office. If this occurs, the insurance may help you pay for any legal costs or compensation.

Worker’s Compensation

Excluding Texas, all states require business owners to have workers compensation insurance in place if they have more than five employees. This form of insurance provides compensation to workers who are injured on the job, at work, usually on the property. In some states, it is possible for workers to claim on injuries that they suffered from while away from the business property within business hours. The insurance can be used for anything from paying medical bills to covering lost wages. By having worker’s compensation, business owners can avoid the possibility of injured employees suing for damages due to an injury. Penalties for not having the right workers compensation in place are costly and should be avoided.

Professional Liability

Any business that offers services to clients or customers will need to consider getting professional liability insurance. This protects a company in the event of errors or negligence while offering a service. For instance, doctors have this insurance to in case they are sued for malpractice. It is useful for a wide range of companies from hair salons to law firms.

Product Liability

Product liability relates specifically to products being sold by your business. If you sell products, this will protect you if the product in question is argued to be defective or causes injury to customers. For instance, in the past, there have been toy firms that have been sued for using lead paint on their products. With product liability, these firms were able to avoid expensive legal costs.

Data Breach

Business owners often hold a lot of sensitive data about clients and customers. Usually, if a hack does occur in your business, customers will be the targets rather than your company. As such, it is important to protect yourself from the cost of losing sensitive data. With data breach insurance you will be covered for any legal damages related to this issue. It is important to realize that this insurance protects a business whether the data was lost electronically or through a paper file.

Property Insurance

Property insurance will protect your business from any damage to your property or any items inside it. For instance, it ensures that you are covered if computer hardware is stolen from your office. Or, if a fire destroys part of your building. It is also possible to increase the insurance policy to ensure that loss of earnings are protected if your business is not able to function due to the damage that has occurred.

Commercial Auto Insurance

You might want to think about personal automobile insurance if you are using a fleet of vehicles for your company. This is going to be particularly important for any business that has transportation as a major part of their business model. For instance, a logistics business owner should make this insurance a top priority. It protects you from bodily injury, physical damage and liability in the event of an accident on the road involving a car your company owns.

Homeowner’s Insurance

If you are running your business from home, homeowner’s insurance is going to come into play. This will protect you from the loss or damage of any property in your home. It can also ensure that you are covered if any injury occurs in your home or an accident that you may have caused.

Renters Insurance

Renters insurance is specifically for business owners who are renting their home or their property. Similar to homeowner’s insurance it protects the renter in the event or property damage, a personal injury or damage to the property itself.

Life Insurance

It’s possible that your business is going to have the potential to make you a lot of money in the future. If you passed away, you would want to make sure that your loved ones still benefited from the potential earnings of your company. With a life insurance policy, the insurance company pays out a certain amount of money to your beneficiaries. This amount is based on how much you would have expected to make if you had lived a full life. As such, it can give new business owners peace of mind and guarantee that the potential for their business earnings are protected.

Personal Umbrella Insurance

Finally, you should consider looking into personal umbrella insurance. This gives you an extra level of protection from legal claims, property damage and any other financial loss that you might incur. Often, this form of insurance is sought out when all other forms of coverage have been used. As such, it is commonly used by larger corporates and bigger businesses. You probably won’t need it straight out of the gate.

Additional Resources

5 Key areas to look into when looking into business insurance
25 Expert Insurance Tips When Starting a Business
Business insurance when you’re self employed

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