What liability insurance do you need for a small business?

The Central Market, Hội An
Creative Commons License photo credit: Matthew Wilkinson What liability insurance do you need for a small business?

Liability insurance for small businesses offers vital protection and cover, there are two main types available in the UK, both of which need to be given careful consideration before purchasing.

All employers are legally required to have Employer’s liability insurance and it is almost always wise for businesses to have Public liability insurance as well.

Employer’s liability insurance not only covers employees against injuries or accidents in the workplace, it also covers the employer if subsequent claims are made in such instances. If an employee trips over a computer cable and sustains an injury, they may well be able to claim against the employer for failing to make their workplace safe.

Similarly, Public liability insurance is necessary if the operation of the business involves the public entering the premises. It will protect the business against claims made by members of the public against it or its employees for such things as falling or slipping on a spillage. The cover also includes any associated legal and medical expense or compensation that becomes necessary as a result of such claims.

Most people are aware that the compensation which can be paid out in relation to liability claims can be huge but what less people know is that without any liability insurance, this pay-out will be the small business owner’s own responsibility and has the potential to completely break the business.

As previously noted, all employers are legally obliged to have Employers Liability cover and that cover has to be for at least £5m, however, most insurers’ policies provide a minimum cover of £10m. In addition to all the points made above, it should also be remembered that the Health and Safety Executive may impose a considerable fine if an appropriate insurance for small business is not in place.

Although the UK may be someway away from a ‘where there’s a blame, there’s a claim’ culture, it is also true that the days when a slip or an accident would be just brushed off with a ‘no harm done’ are now a long way behind us.

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