Covering liabilities in the UK

Liability insurance is the most common type of business insurance and for good reason. Employer liability and public liability claims are by far the most common and most expensive. Almost every aspect of operating a business has some inherent risks from direct contact with the public to employee injuries, operating without the proper protection leaves you and your business open to disaster.

Employer liability protection covers the costs of an employee becoming injured or ill from your work environment. In the UK all businesses are required to carry a minimum of £ 5 million in employer's liability insurance. This is to cover all financial responsibilities that may result from an employee or former employee becoming injured or ill and includes any medical costs, worker's compensation or legal proceedings that may be required. Even if your business is found not to be liable for any compensation you will need the coverage to be in compliance with the law and if found to be operating without it you can be fined or worse.

Employer's liability protects you and your employees but does not cover customers or other businesses that may incur loss or damage because of your operation. This is why almost every business has some form of public liability insurance in place regardless of their level of contact with the public. In general, most UK businesses carry at least £ 1 million in public liability protection. Public liability can protect you from much more than just a customer slipping on a freshly mopped floor, many times something as seemingly harmless as and item on a shelf can result in a claim against your business. There are also many occasions in which a company itself becomes the target of another business or organization, very often without any provocation or reason and you will need the financial backing to mitigate the case regardless of your involvement.

Many liability providers will offer packages where by the business can get specific types of insurance to complement their particular line of business. Some good examples are product liability, professional indemnity cover for solicitors or other professional people and 'key man' cover. Product liability offers protection against the product itself malfunctioning and causing loss or damage to customers, business or property. Online retailers and third party distributors commonly add some form of 'goods in transit' protection on top of product coverage since their main risks are not only the product malfunctioning but also damage during shipping. Specific types of business will require different levels of protection, industrial applications have many more risks to the public than most due to hazardous materials shipping in and out, by products and industrial accidents. Computer and software organizations have the main risk of damage to the customer's systems from their product and therefore carry more product liability.

Professional indemnity is another form of liability that is more specifically used for businesses or key business people that offer advice or consulting that may result in damage or loss to a third party. Many operations are exposed to this potential risk like engineers, consultants and IT professionals to name a few. There are several common situations that can result in a professional indemnity case including negligence, data loss, copyright infringement and even libel or slander. Any one of these claims can easily consume all your organization's time and money even if you are absolved of all claims. What is known as 'key man' coverage is basically the same but more for a particular individual like a CEO or spokesman that may become the target of these types of claims.

Although there are many aspects to consider for business insurance in the UK, you need to make sure you have the foundation of proper liability coverage and from there you can assess the rest of your unique needs with your provider to ensure the longevity of your business regardless of what the future may bring.
 

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