Public Liability Insurance

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What are the factors which may affect the business insurance premiums?

There are many factors which can affect the premiums you are quoted, including -

• Scale of your business
• Type of work you do
• Claims history
• Business experience
• Cover you require for the business
• Location of business

Business Insurance

Should anything go wrong business insurance is there to protect your company from any financial losses. It can help towards legal fees and compensation should a buyer not pay you, it can cover damage to the property you own and also cover you if a member of the public or an employee wants to make a legal claim against you.

Business owners are able to add additional bolt-ons policies to their normal building and contents cover and the main 4 are;

What things are covered with public liability insurance?

Public liability insurance will mainly cover 3 areas

Cost of Compensation

Should a customer or a client injure themselves at your business property, they could launch a compensation claim which could run in to the thousands. Your public liability insurance will pay for that claim up to the value of the policy, even if you are working at a client location and you’ve damaged something of your clients, public liability insurance would cover the cost of repair.

Cost of Barristers and Solicitors

If a member of the public or a client has pursued the matter against your business in a court of law, the legal costs could be huge. Public liability insurance could pick up the cost of those solicitors and barristers fees

Cost of Repairs

If you or an employee damages something belonging to a member of the public, or one of your clients, be it on-site or off-site, public liability insurance will cover the cost of the repair

What is employers’ liability insurance cover?

It is a policy which protects you and your business if a claim is made by an employee and even an ex-employee.

What does employer liability insurance cover for a business?

If an employee makes a claim against you, employer liability insurance will cover the claim and the legal costs.

What happens if you don’t have employer liability insurance?

If you don’t have employer liability insurance and you have people working for you, you could be fined up to £2500 per day. There are a small number of exemptions like family run businesses that are not operating as limited company.

How much cover would a business need for employer liability insurance?

Most businesses are required to have at least £5m in cover in their policy, but £10m is the standard cover amount. It can also be combined with indemnity insurance and public liability insurance

Is employer liability cover expensive?

No, they start from as little as £5 per month but certain businesses in higher risk sectors will pay more.

What is business interruption insurance?

It is an insurance policy to cover for the loss of earnings due to calamity hitting the business such as a flood or fire.

Is business insurance required?

It is not a legal requirement but if you rely on a fixed premises for your business it is worth thinking about adding business interruption insurance when you compare business insurance. The key things to think of are; How much assets does your business hold? How long would it take to get back operationally if a disaster such as flood were to hit your business? How many staff would you have to pay while your business is not making any money and trying to get back to being operational?

How about contractors that work off-site, will having business interruption insurance make sense?

If as a contractor you have an office, think about what interruption could be caused by a fire. How long will it take you to become operational and what the cost would be in missed opportunities due to you spending time getting the office back up and running.

What type of ‘interruptions’ does business interruption insurance cover?

• The obvious one is storm, flooding and fire which has caused the business to lose income
• A business that has been vandalised

More specialised policies tailored to businesses that have computers as the mainstay of the business can purchase a more tailored business interruption insurance

What is product liability insurance?

It's an insurance policy that is designed to cover products you manufacture or sell that causes injury or damage to a member of the public. The member of the public then makes a claim against your company for compensation. Product liability insurance will cover the cost of compensation.

What Specifically is Product Liability Insurance?

Product liability insurance is a level of cover designed to help businesses cope with situations where a member of the public or client has sustained injury or received damage to an item of theirs due to a product your business has manufactured, sold or both. Product liability insurance will cover you and your business should the incident arise.

What Things does Product Liability Insurance Cover?

If your business makes, sells or does both, and a product has become faulty and has caused a member of the public to become ill or injured which in turn results into a lawsuit being launched, product liability insurance will help cover the compensation claim. Product liability insurance will cover a product for 3 years after its manufactured but policies with longer time frames are available.

To give an illustrative example. If you sell jam and one of your customers has found broken glass in the jar and has sought compensation, then product liability insurance will cover the cost of the compensation.

Is product liability insurance mandatory?

It isn’t a legal requirement but if you manufacture or sell goods it's worth thinking about because customers can claim millions in punitive damages. Big businesses are not the only ones that can be sued, even if you’re a sole trader which sells imported goods, you could be held liable should something go wrong with one of the items you sell.

What is the right level product liability cover?

The level of cover really depends on what you see as a business to be adequate. Typically, most businesses will look for cover from £1 million to £5 million, but higher levels of cover are available.

It should be worth noting, if a claim is being made for £1.25 million and the level of cover is £1 million, then the shortfall of £250k will have to be found by other means.

Is product liability insurance cover compulsory? It isn't required by law to have product liability insurance but certain commercial contracts may mandate you to have the insurance in place for a certain level of cover for product liability.

How much cover should you get for product liability insurance?

This is very much dependent on you, most businesses will look for cover between £1 million and £5 million.

What situations would a business be held liable for defective products?

Situations where a business would be held liable would include the following;

• If your business manufactured an item
• If your business's brand is on the packaging or on the item itself
• If your business has repaired the item
• If your business has imported the item from outside the EU
• If your business cannot prove who the manufacturer of the item is
• If the manufacturer of the item has become insolvent.