Advice on Liability Insurance
Why buy Liability Insurance?
It is the law in this country that every employer must insure their liability for disease or injury to their employees to the extent of at least £5 million. This is called Employer’s Liability insurance.
Public liability insurance will protect a business against its legal liability for causing death or injury to members of the public or damage to other people’s property.
Trades people may find that they are unable to trade with some organisations unless they can show that they hold public liability insurance to an appropriate level which might be between £1 million and £10 million.
There are a very few trades (riding schools for instance) where the holding of public liability insurance is also compulsory under law.
What is covered?
Employer’s Liability insurance will protect the employer against claims for injury to any employee during the course of his employment that he is legally liable for.
Public Liability insurance protects the organisation against claims from members of the public for injury or damage to property caused by the negligence of its employees.
It is very common for employers liability insurance to be offered as a package with public liability insurance, although it is also possible to purchase each separately.
What is not covered?
Employer’s Liability insurance will not cover injuries caused whilst travelling in motor vehicles. This kind of liability will be covered by the vehicle insurance.
Similarly public liability insurance will not cover injuries caused whilst travelling in a vehicle, or in a boat or a plane. It will not cover injuries to employees, because this will be covered by employer’s liability insurance, and it won’t cover risks which should be more properly covered by some other kind of insurance. For instance, if a repairer of computers holds a client’s computer overnight in order to fix it, the loss of the computer due to a theft should be covered under a commercial property insurance, it is not public liability.
Public Liability insurance will also not cover any damage due to poor workmanship.
It is normal for there to be an “excess” on public liability insurances. This is an amount of money that you are responsible for if you make a claim. Suppose you make a claim for £1000 of damage. If you have an excess of £250, you will be required to pay for the first £250 of the claim and the insurer will pay the rest.
What does it cost?
This depends on the trade being insured and the number of employees.
A sole trader in a low risk trade can expect to pay less than £271 for public liability insurance.
What to watch out for?
What is the total amount of cover being purchased? £1 million to £10 million is usual for public liability insurance.
What options are worth having?
Some public liability insurances allow for an optional tools cover which will your tools against theft from the place of work, or from a van. If purchased elsewhere, this cover can be significantly more expensive.
This is just an introduction to liability insurance and is not intended to be representative of the covers or restrictions offered by any particular insurance or that all insurance provide the protection described. You can get a recommendation for a particular insurance to suit your own circumstances by talking to the skilled staff at any Coversure branch.