Who needs liability insurance?
The world of insurance can be a very confusing one, but is absolutely essential in protecting both employers and employees. There are two types of liability insurance: public liability insurance and employer’s’ liability insurance.
What’s the difference?
Public liability claims are very expensive, meaning £1 million is required as the minimum cover amount, but if you work in the public sector you could be required to prove that your business is covered upwards of £5 million for damages. Employer’s liability however is usually combined with public liability insurance to provide upwards of £10 million cover for everyone in your business,this is because company directors are still classed as employees under the policy.
If you only have one employee under your business, then employer’s liability insurance is required by law. So if you’re not insured and one of your staff files an injury claim, the fees will start mounting up. Save yourself the risk of landing in piles of debt by taking out a comprehensive liability insurance policy to provide effective cover throughout the working day.
Which insurance do I need?
Public liability insurance is for those of you who don’t employ any staff, and is there to protect the public from suffering damage or injury in connection with a business. It provides cover against injury or damage claims made by members of the public, and may include:
- A window cleaner who has left their ladder unattended and a passer-by walks into it.
- A cleaner who didn’t put out a ‘wet floor’ sign out after mopping the floor and someone slips over, hurting themselves.
Employer’s liability insurance on the other hand is for businesses that do employ staff, and is there to protect you and your business from any lawsuits that employees may start following an illness or injury at work. This type of insurance can cover accidents such as:
- An office worker who trips over a cable and breaks their finger.
- A shop assistant in a small shop who falls down some stairs and hurts themselves.
- A member of staff falling off scaffolding and breaking a bone, needing time off work.
Who might need public liability insurance?
Here are a few examples of the different types of businesses who may require public liability insurance:
- Cleaners
- Caterers
- Window cleaners
- Builders
- Plumbers & heating specialists
- Electricians
- Carpenters
When it comes to employer’s liability insurance, anyone who employs staff should make sure that they are covered by a liability insurance policy.
Why is it so important?
The importance of having employer’s liability insurance is not just so staff are protected if they become injured, but it’s also there to protect you and your business: compensation claims have the potential to reach in excess of £10,000+, and this isn’t great news for small businesses who may have to close down as a consequence.
Therefore, both types of liability insurance are essential for protecting your business and ensuring you don’t have to pay out hefty fees for damages. On top of this, GovUK states that you can be fined £2,500 every day you are not properly insured. Aside from the financial benefits, liability insurance also strengthens your working relationships, as it shows both employees and customers that you are considering their safety and making yourself accountable.