Ongoing liability insurance?

[Philg54]

I have been running a business as a sole trader for almost 20 years, and am coming up to retirement. I intend to just cease trading, rather than try and sell it. I presume that when I tell HMRC that I have ceased to be self-employed, I then cease to be liable for any claims against my business and can terminate by business insurance?

 

[Frank the Insurance guy]

Hi @Philg54 ,

It really depends on what your business is and what your previous insurance arrangements were.

It is usual that your Public and Employers Liability policies will respond to claims based on when the incident causing the claim occurs. Therefore if a claim is made after you retire, the insurer at the time the injury or damage occurred will deal with the claim, even if the policy is no longer in force.

If you were selling a product, you will need to check your Products Liability cover - if it only responds when the incident occurs (not when the product was sold), you could be left liable if your product causes injury or damage after you have retired.

If you were providing a "professional service" and held Professional Indemnity cover - these are on a "claims made" basis. This means that the insurer at the time a claim is made is responsible, NOT when the work or services were performed. To deal with this you would need to continue this policy on a "run-off" basis to ensure that it still is in place if a claim is made against you after you retire.

These are the likely to be the main covers you may have.

 

[Socio South West]

I was always advised that whatever else I destroyed by way of old business records, I should keep evidence of insurance permanently. As I succeeded to my father's business, I have insurance policies tucked away dating back to the 1950s in the event that some claim should emerge from the dark and distant past.

 

[Philg54]

It would appear then that I need to continue insurance cover after I cease trading until the day I die; just in case something I've done happens to cause injury to someone somehow?

 

[Frank the Insurance guy]

It would appear then that I need to continue insurance cover after I cease trading until the day I die; just in case something I've done happens to cause injury to someone somehow?

Depends what policies as per my previous post...
- Professional Indemnity - YES
- Public and Employers Liability - No
- Products liability - Maybe