Liability Insurance

Liability insurance is a part of the suite of commercial insurances you need to protect your business. It is usually a very cost effective cover with relatively low premiums for large limits in the millions and should you receive any claim for damages it will protect your firm from the financial penalties and largely prohibitive compensation awards resulting from a successful claim.

Liability insurance is designed to offer specific protection relating to third party claims arising from accidental personal injury, bodily injury and property damage as well as covering other connected damages that may be awarded against you e.g. legal costs – see below.

Any legal costs you incur in the defence of your business would not normally impact on the policy limits unless the Policy Terms and Conditions specifically state otherwise.  This is a particularly useful benefit as defence costs can be quite prohibitive when cases are defended in the courts as a civil matter.

Payments awarded as a result of a successful claim are usually paid directly to the claimant that suffered the financial loss or damage.

PUBLIC, PRODUCT & EMPLOYERS LIABILITY FROM THE PI DESK LTD

If you purchase Professional Indemnity from our online quote and buy website you will (depending on your occupation) have the option to add Public, Product Liability & Employers Liability insurance. Please note that where your occupation is not eligible to add PL/EL our Q & B system will advise you accordingly.  PL/EL is not available in isolation from the online Q & B system but the benefits of and reason for buying PL & EL is explained below.

PUBLIC & PRODUCT LIABILITY EXPLAINED INSURANCE EXPLAINED

Public Liability insurance covers you in respect of compensation awarded to third parties arising out of accidental Personal Injury to them or accidental loss or Damage to their Property as a result of your professional activities.

Why you should have Public Liability insurance

  1. It protects the business – Even if you don’t have visitors to your office or home, you could still suffer a public liability claim against your business; for example, if you accidentally damage a client’s property in their own home or office.
  2. You have limited funds/resources – Easy access to ‘no win no fee’ legal services helps individuals claim compensation and this may increase the likelihood of your business experiencing a public liability claim.
  3. You need legal expertise – The legal and compensation costs of defending your business against a public liability claim could significantly damage your business.
  4. Support your staff – Anyone working for you could be the cause of a public liability claim against your business should their actions at work cause an injury to a client or member of the public.
  5. Satisfying your clients – It is common practice for companies and organisations to insist that all suppliers providing professional services have public liability insurance cover in place.

Product Liability insurance covers you in respect of compensation you may have to pay to third parties arising out of accidental Bodily Injury or accidental loss of or Damage to their property caused by any of your Products.

Claims Examples:

If there is an accident, someone is injured or their property is damaged and allegations are made suggesting it is your fault, you could find yourself defending very expensive legal action.

Accidents can happen every day – for instance a client could have an accident in your office by tripping over a badly placed item of furniture or loose carpet leading to a serious injury claim.

You could damage a client’s property when visiting their premises which could be as simple as dropping your coffee onto a very expensive carpet or piece of electronic equipment.

Whatever the circumstances it could leave you defending a claim for personal injury and/or bodily injury arising from the use of your products and/or damage to their property.  The resulting outcome could lead to expensive legal costs and compensation award against your firm.

HOW MUCH PUBLIC & PRODUCTS LIABILITY INSURANCE DO I NEED?

Most Insurers offer a choice of £1m, £2m and £5m levels of cover for Public & Products Liability cover.

You should consider the space/environment/occupation you work in and carefully assess the risk/exposure to the firm that could arise from accidents to third parties and from property damage.

You should also consider that Personal Injury claims could be much more expensive than property claims.

What’s the worst that could happen – what’s the worst case scenario – could you recover from a successful claim resulting in hundreds of thousands of pounds in compensation.

EMPLOYERS LIABILITY INSURANCE

For most UK businesses, Employers’ Liability insurance is a legal requirement and you could be fined if your business is not covered correctly.  There are some business that do not have to be insured for example, if the only employee is the owner of the company (who holds at least 50% of the shares) or the business is a family business which is not incorporated as a limited company.

The Employers’ Liability (Compulsory Insurance) Act 1969 is a UK Act of Parliament that requires employers to carry insurance against the personal injury of their employees.  This insurance is generally referred to as Employer’s Liability Compulsory Insurance (ECLI). As well as being insured, employers must post details of the insurance for staff to see.  This requirement applies to most companies; exemptions include public organisations and certain micro companies.

As a small business managing people, it is important that you take all necessary precautions to limit the possibility of injury or illness to any of your employees whilst at work. However if they do have an accident or become ill, it may be that your business could be held responsible.

Employers Liability insurance covers you in respect of compensation/awards paid to your employees should they have an accident or suffer an illness as a result of the work they conduct for you.

Why you should have Employers Liability insurance

  1. It’s a legal requirement – keep on the right side of the law
  2. You have a business with people to manage – Any person working for you could make a claim for damages.  This can include employees, voluntary helpers and/or self-employed whilst working under your supervision
  3. You have limited funds/resources – Easy access to ‘no win no fee’ legal services helps individuals claim compensation and this may increase the likelihood of your business experiencing a liability claim if employees have an accident or suffer an illness which has been caused as a direct result of their work for your business.
  4. You need legal expertise – The legal and compensation costs of defending your business against an employers liability claim could significantly damage or disrupt your business.
  5. Reputational damage – you need to prevent the loss of long standing clients, avoid expensive and costly reputational/brand rebuilding.

HOW MUCH EMPLOYERS LIABILITY DO I NEED?

Most Insurers offer a choice of £5m or £10 levels of cover for Employers Liability cover.

You should consider the space/environment/occupation where you conduct your business and carefully assess the risk/exposure to the firm that could arise from accidents to third parties and from property damage.

You should also consider that Personal Injury claims could be much more expensive than property claims.

What’s the worst that could happen – what’s the worst case scenario – could you recover from a successful claim resulting in hundreds of thousands of pounds in compensation.

Note for Employers

With all Employers Liability insurance you will be required to supply some additional information about your business, including your Employer Reference Number (ERN), so it can be recorded on the Employers’ Liability Tracing Office (ELTO) database. This must be completed so that you Employers Liability insurance can be placed on cover.

Download the ELTO Guide for Employers

The Health and Safety Executive enforces the law on Employers Liability.  You could be fined £2,500 for each day you’re without the necessary cover and £1,000 for not displaying the appropriate certificate.

Download the HSE’s guide for employers