Limiting Personal Risk?

Manda · #1 (**permalink**) 15-03-2008, 14:55

Right here goes these are my random thoughts so please tell me if I make as much sense as a politician and I'll try to clarify.

My husband and I both run businesses now I'm a milliner so sell what I make, through a website I occasionally take custom orders but I don't think I'm going to ever be sued for mega money. ( I can't think of any cases of serious bodily harm from a hat unless you un-picked the braiding and then the stitching holding the wire in place and stabbed yourself ) but I have insurance.

My husband is a electrician and he works a day job and runs his own business now he is also fully registered and insured but this is where I start to worry. Pay outs are getting larger insurance companies have so many get out clauses if he were to be sued what can we do to limit the risk to us? Not that he plans to mess up but some people do like to fiddle after he has left and things can go wrong.

He is a sole trader, we have a joint mortgage, and children to worry about.
Would he be better being a LTD Co. so only the company assets could be affected. What would the legal implications of this be? Should I get him to sign the house over to me so if the worse came to the worse we would always have a roof over our heads? Again implications and in that case would he have to be taken off the mortgage?

I am eventually going to book a session with a solicitor to go over all this as he plans to take the leap into full time self employment as soon as we are a bit more financially secure (we had a large unexpected unforeseen personal hit last year).

I need some food for thought as to what we should be looking at and to help us to make the best use of the legal advise we will seek.

It is sad the litigation is a very real fear now.

Calibre Designs · #2 (**permalink**) 15-03-2008, 15:41

Hi,

I am by far a legal bod but have sat in countless meetings. From what I see here, he should definitely go Limited. That way, you/your husband is working for the "company" and the "company" is hiring you/him. Should anything happen that was not planned, it would be the "company" in trouble and not you or your husband.

Higher tax band I would imagine though but its worth the night's sleep.

Thats only the surface. I should definitely speak go to speak to an accountant!

I know a very good one who could possibly go through some details with you over the phone. PM me if you are interested.

Kind regards

Kay

PI Guy · #3 (**permalink**) 15-03-2008, 15:55

he needs public liability and professional indemnity insurance

Jenni · #4 (**permalink**) 15-03-2008, 17:54

If you want to go Limited, talk to your Accountant asap as the CGT changes mean it may well be more tax efficient to do so this before 5th April - though if he only runs his business part time then he may not be affected. Worth asking your accountant though

Andy Trish · #5 (**permalink**) 15-03-2008, 18:05

Quote:

Originally Posted by PI Guy

he needs public liability and professional indemnity insurance

TRUE, hopefully he's got it already

Manda · #6 (**permalink**) 15-03-2008, 18:27

Yes he has insurance as I said in my original post, what worries me is how many loop holes there are with insurance companies, they won't pay out for so many reasons and I'm worried about this we do have legal cover but I have heard of cases where awards made are higher than the value of the insurance leaving the person involved to find the shortfall.

He has also heard cases where a electrician has done some work this had been altered modified or tinkered with and then a fault develops and it falls to the original electrician to prove that the modifications were not their work, and no it is not possible to photograph every bit when you are refitting a whole unit.

Indizine · #7 (**permalink**) 15-03-2008, 18:50

I think you are best to check the small print in your insurances policy. Hiscox are supposed to be very good at the cover they provide.

Never go fo the cheapest. The small print hides exactly why you are paying less.

Fuzzy · #8 (**permalink**) 15-03-2008, 19:41

Just moving this to Accountants section guys

elainec100 · #9 (**permalink**) 16-03-2008, 12:37

The business link web site mught be a good place to do some back ground reading - some great stuff there on limited v sole, insurances etc.

http://www.businesslink.gov.uk/bdotg...sslink.gov.uk/

There is a lot of info but I fund it well organised to get to the thing which you are interested in. Hope it helps.