Public Liability
What is Public Liability and Employer’s Liability Insurance?
Public Liability Insurance Cover should be considered if members of the public, clients or customers visit your premises. If you run a home-business, and customers sometimes visit you there, public liability cover might also be a good idea.
How does Public Liability Insurance protect me?
Public Liability Insurance gives you and your business protection should a claim be made against you. This could be damage or injury to people or property as a result of your work. Public Liability Insurance will cover you if someone is accidentally injured by you or your business operation. It will also cover you if you damage third party property while on business. The cover should include any legal fees and expenses which result from any claim by a third party. This type of insurance will only cover third party claims (i.e. not your own employees – you need Employers Liability Insurance for your own employees). You should always ensure that your insurer knows what type of business you run, and you should always inform them if your circumstances change, as this may affect your policy.
Examples of Public Liability Insurance Claims
1) You run a dry cleaning business. A customer comes in to pick up some clothes, but trips up on a loose bit of flooring in your shop. Public liability insurance would cover your business if the customer claimed for injuries sustained as a result of the un-maintained floor.
2) You are a self-employed IT support technician. Whilst at a customer’s site, you accidentally knock over a cup of coffee, and the contents pour down the back of a computer, damaging it beyond repair. Public liability insurance would cover any claim from the customer.
How much cover do I need?
This will depend on the nature and size of your business operation. Many small businesses will have £1m of Public Liability Insurance cover – this may sound a lot, but if you suddenly have several claims against you, the costs can mount up. Despite the seemingly large amount of cover, typical premiums are not high. Having public liability is not a legal requirement but it is good business practice. Local authorities will generally demand a minimum level of £2m public liability insurance for works to be undertaken at their premises or on their behalf.
Our Public Liability cover is available for over 100 contracting trades and professional occupations. Cover is available in steps of £1m, £2m and, for the majority of cases, £5m. Our product is specially designed to cover individual tradesmen, professionals and small businesses, up to a total of 10 people, with or without limited company status. Where we cannot provide an automatic online quote for your trade or profession is not listed, please follow the on-screen instructions and we will still endeavour to get you a quote.
Our Employer’s Liability Insurance
Employer’s Liability Insurance covers you if any of your employees have an accident at work and make a claim against you. Employer’s Liability Insurance will help meet the costs of compensation or legal fees for employees who are injured or made ill at work through the fault of the employer.
Our Employer’s Liability Insurance comes at the industry standard level of £10 million. If you do not have employees, or do not require Employer’s Liability Insurance, you do not have to include it in your policy.
If you are a sole trader and do not employ anyone (or you only employ close family members), you should also be exempt. However, if you occasionally hire staff or use temps or seasonal workers, you must take out Employer’s Liability Insurance.
The HSE provides a guide to the Employers’ Liability (Compulsory Insurance) Act 1969 here (http://www.hse.gov.uk/pubns/hse40.pdf).
What does it cover?
Employer’s Liability Insurance will meet the cost of compensation for injuries sustained to your employees (or illnesses), whether caused on or off site. It should be noted that this type of insurance only covers your employees. Potential claims made against you by other third parties (members of the public) can be covered by Public Liability Insurance.
If any of your employees are injured in a motoring accident, any claims may be covered separately by your motor insurance policy.
Generally, someone is defined as your employee if:
- they are under a contract of service
- you deduct National Insurance contributions and income tax from the salary you pay them
- you control when, where and how they work
- they cannot employ a substitute when they are unable to work
How much cover do I need?
By law, an employer must have Employer’s Liability Insurance and be insured for at least £5 million. Most insurers automatically provide cover of at least £10 million. Your Employer’s Liability Insurance must cover all your employees in England, Scotland, Wales and Northern Ireland.
If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory Employer’s Liability Insurance. Limited companies with only one employee, where that employee also owns 50 per cent or more of the issued share capital in the company, are also exempt from compulsory Employer’s Liability Insurance. However, there is nothing to prevent an exempt employer from choosing to buy Employer’s liability Insurance, and many do, in view of the financial security it can provide.
The Health & Safety Executive have the powers to fine your business up to £2,500 per day if you are not covered properly for this type of insurance.
Additional Cover Options
Further options are also available to cover tools, hired in plant, contract works and the use of lathes. We are also able to offer personal accident insurance, business interruption insurance and business contents cover as extensions to your policy. These options are made available to you, when available, depending on your trade.
There are no legal requirements covering these optional aspects of the policy however we strongly recommend you consider each of them. By including them in your policy you may find you get better cover for a lower premium than by insuring them separately.
