Ulster Gazette - Features - Public Liability Insurance and More

Features

Public Liability Insurance and More

Tuesday, 24 August 2010

As the owner of a small or medium-sized enterprise (SME), you will already be aware that policies such as employers liability insurance are compulsory, but you may be wondering why you need them and whether you will get your money's worth if you have to claim. Unfortunately, all it takes is a small mistake on your part and your employees, customers or even members of the public could be taking you to court.

Having business insurance is an important part of protecting your livelihood. Your income and that of your employees comes from your business and it is important to protect that in every way you can. The world of business is full of risks and setting up simple insurance plans is one of the most important ways you can manage that risk; no insurer will tell you that your business will succeed simply because you have insurance in place, but it might fail if you don't have it.

The Association of British Insurers stated that the UK insurance industry paid out £3.3 million in liability claims every day during 2006. This included claims for accidents that occurred on business premises involving employees, customers and members of the public. This startling figure shows how important it is to protect a business from these types of claims, particularly with the rise of the 'claims culture'.

To that end, what kinds of insurance should you consider if you are looking to shield your business from huge compensation claims and accidents which are your fault?

Employers' liability insurance is compulsory if you have any employees and covers you for any illness or accidents they may have while completing their work. This type of insurance will pay for any compensation and legal fees. In fact, it will even cover any money owed if your employee takes you to court after your business is no longer operating. By law, you should have cover for at least £5 million, but higher amounts are offered as standard by many insurers.

The premiums for your insurance will be based on the number of employees and the perceived risk to them, as judged by your insurer. They may not visit your business, but will work out what the risks faced by your type of business are and the health and safety implications that might affect you. If you manage your health and safety practices well and can demonstrate this, then you may find your insurance is cheaper.

Do not consider putting off your employers' liability insurance as the Health and Safety Executive can fine you £2,500 for every day you trade without it. When you are just starting out, that sort of money is not easy to find.

You might think that you have trained your staff exhaustively but accidents can and do happen. Public liability insurance will cover you for any employee injury or death, or damage to property that occurs because of negligence by you or your employees. This insurance will cover anyone who is not your employee, such as customers, delivery people, those who are visiting your premises or attending an event organised by you.

In addition to these two very important insurances, it might be worth considering professional indemnity insurance as well. If you are involved in offering advice on a professional basis to members of the public and that advice causes them to lose money then you may find yourself in hot water.

Accountants, lawyers and brokers all come into the category of small businesses which require professional indemnity insurance. In fact, most professional people who are part of a regulatory body are likely to need this type of insurance to be a member. If this applies to you, then make sure that professional indemnity insurance is your top priority.

Another option when it comes to finding the right insurer is to use one recommended by your trade association or regulatory body. They should have links with insurers that specialise in your type of business. In any case, always make sure that your insurer is properly authorised by the Financial Services Authority.

Finally, don't forget that claims against your company can not only affect your cash flow, but may also affect how your company is seen by the public and your customers. If you are able to manage the publicity and be fair to all parties, then these sorts of events can have little effect on how you run your business. Having good business insurance is the best way to achieve this.