Business insurance to cover 2 companies at the same address / very similar industry.

[CupOfTea]

Hey folks, so I am a sole director of a business IT company, as well as a 50% partner/director of another IT company - we basically split the companies to allow one to be VAT registered (for the business customers) and the other remains non VAT registered and is mainly a residential focused IT support company.

At the moment we are paying for 2 sets of business insurance, even though we quite often cross over clients / help each other out and operate from the same premises, same registered address for both companies, is it possible to get such a thing that covers both companies without paying 2 different policies?

Both companies have different company numbers of course, as they are both Ltd companies.

Appreciate any help in advance

 

[Ozzy]

is it possible to get such a thing that covers both companies without paying 2 different policies?

I feel confident enough to answer this but if I'm wrong I'm sure @Frank the Insurance guy will correct me.

Simply; nope! The two companies are two separate legal entities and so will need to be covered on their own merit and liabilities individually.

 

[David Griffiths]

Your problem may well be solved (not to your liking) when HMRC find out about the split and invoke the provisions against artificial separation of businesses! Having one business for registered customers and one for non registered customers is a common (and almost invariably unsuccessful) ploy. Having two businesses with one insurance would reinforce the HMRC stance.

 

[Mark T Jones]

As above - you are walking a line with artificial separation - if you jointly insure (or jointly anything) you will definitely be on the wrong side of that line

 

[CupOfTea]

Understood, although I would definitely argue against artificial separation with HMRC, given both companies combined revenue barely would force registration of VAT- the first company has been trading 12+ years without requiring VAT registration - but, point definitely taken

 

[Paul Kelly ICHYB]

barely would force registration of VAT

Which means hey would....

 

[Frank the Insurance guy]

Hi @CupOfTea ,

I assume you are talking about insurance for the premises?

You're not in an unusual position. I have come across this and arranged cover where they are 2 "sister" companies with common ownership.

Best option is to speak to an Independent Insurance Broker - much will depend on the detail, which they will take time to discuss with you.

Availability of a single policy will depend on a number of things including:
1. Do employees of one company carry out the work for the other and charge for this?
2. Is property/assets all owned by one company or by both?

You may be able to arrange property cover under one policy, either in joint names or in one name, but with the other company's interest noted as owner of some of the property.

You will still need a separate Employers Liability policy in each company name - to meet legal requirements.

However, I would always caution a joint policy where you do not own 100% of second company - the reason is that if some catastrophe affected the other company, your 100% owned company's future insurances would be affected.