When you first become a self-employed doctor or dentist, it is likely that you will choose to do this a sole trader. There are many benefits to this, not least that little set up is required. However, in the longer term, you might benefit from setting up a limited company. When you choose to do this, consider your insurance.
If you change your business status to a limited company, make sure that you speak to your insurer
You will likely already have a number of insurance policies as a self-employed medical or dental practitioner – such as professional indemnity, public liability and hands and eyes cover. However, if you choose to set up as a limited company, there is more to think about, and some of these changes might affect your insurance policy.
If your policy is not accurate and consistent with your new status, then your cover will become invalid. It is vital that you talk to your broker about any changes that may affect your insurance.
If your insurances becomes invalid and you have a claim against you, or you are unable to work due to illness or injury, you will not be able to make a claim. This will mean that your personal income and wealth could be at risk – as well as your reputation and long term career. Also remember that underinsurance is as dangerous as no insurance at all.
Some of the things you need to consider when setting up a limited company
- You will be required to trade under a company name which will be on legal documentation. A change in trading name will need to be reflected in your insurance documents.
- Your income may be increasing significantly, or you might be providing more or different services that require a new insurance policy, or higher level of cover.
- How you pay your taxes will change and your company will be subject to corporation tax.
- As a company director, you will be paid as an employee or through dividends.
- There are legal considerations – such as registering with Companies House and appointing a Company Secretary.
- Your liabilities and responsibilities will change as a company director, and if your limited company owns property or vehicles. However, as a limited company, you will also have additional protection from certain liabilities.
Managing your insurance
Most professionals choose to change their business status for more favourable tax and liability purposes. While you will take legal and financial advice on these changes, don’t forget to also contact your broker.
At All Med Pro, we will talk you through what has changed that will affect your existing policies and identify where they need to be amended or new policies are required. Ensuring that your insurance includes the right cover and level of protection will ensure that you can continue to practise safe in the knowledge that you are fully protected.
It is important to remember that having a limited company does not fully protect you from all liability associated with your profession. Personal wealth can be put at risk if someone takes legal action against you as a director of a company.
Ensuring you have the extra level of protection might mean additional insurance requirements (for example Directors’ & Officers’, or Cyber Liability), or an increased (or in some cases, reduced) level of cover that will change your premium.
Contact All Med Pro
Speak to one of our specialist team at All Med Pro to discuss your insurance requirements.