Don't get confused about your business insurance cover. For information on getting covered read our frequently asked questions.
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Business insurance cover explained
If someone working for you becomes ill or injured as a result of their work activities you may face a claim. Depending on the seriousness of the injury, the cost of claims related to employer health and safety responsibilities can be very high. That’s why it is vital for every employer to consider Employers’ Liability Insurance.
If one or more other people are helping your business to function under your direct supervision and control (even if you are not paying them a wage) then you have a responsibility for their health and safety whilst at work. A written contract of employment does not need to be in place as anyone working for your business is still deemed to be an employee. This includes part-time workers, students on work experience, sub-contractors and volunteers.
In these instances (with the exception of some family businesses), you are an employer in the eyes of the law and therefore you need to take out Employers’ Liability Insurance.
Employers’ Liability Insurance protects your business from claims for compensation from employees. An employee may claim against you if they are hurt or injured whilst working for you. Former employees can also claim against you if they believe they have become ill as a result of working for you.
It is a legal requirement for the Medical Profession, Solicitors, Insurance brokers and Financial Advisers. it can also become a mandatory requirement for a range of professions by their associated Professional body as is the case for Chartered Accountants, Architects Surveyors, Valuers. The amount of cover required can vary according to regulations and membership requirements. Premiums are based on a combination of past annual fees, current and projected annual fee income. Also certain activities would be considered higher risk with annual premiums taking account of total work broken down between various specialisims and higher risk activities.
In most cases, if you have one or more employee, it is; however there are some exceptions as shown below. You should check with one of our business insurance specialists to see if these apply to you:
You may be exempt from having Employers Liability insurance in the following instances:
The minimum legal level of Employers’ Liability Insurance required by a business is £5 million however, depending on the individual business risks and liabilities, more may be required. If you don’t have adequate cover in place, you risk a substantial fine.
Legal defence costs to defend an allegation of negligence against the legal entity business for bodily injury , illness and disease caused to employees arising from your business activities (and within time and geographicial limits of the policy).
Where the business is found to be legally liable then you receive compensation up to the indemnity limit specified in the policy schedule/wording.
For any business involved in the sale, supply, manufacture or repairs of goods/products. Faulty or defective products can potentially cause serious accidents resulting in bodily injury or property damage for others. The financial implications could potentially run into thousands. With Product Liability Insurance you have the peace of mind that there will be legal defence costs paid to defend your business, an din the event of negligence proven against you, the policy will pay compensation up to the limits within the policy. Depending on th etype of cover you arrange minimum limits are £1m and can be increased to £2m,£5m or even higher on request.
If your business involves the manufacture, repair or sale of products, Product Liability Insurance will provide a vital financial safety net and is worth serious consideration. Recalling products and fixing faults can be expensive. Add to those costs any potential claims for medical expenses or compensation as well as legal costs – and the implications become clear. If you think your business could benefit from product liability insurance, call our team on 0800 107 8949.
No, for most industries Product Liability Insurance is not mandatory, however it does cover risk to a significant level and for this reason Product Liability Insurance is expensive compared to other business cover. Some purchasing companies may also demand Product Liability Insurance before buying from you. Professional advice should be taken when considering the scope and level of cover required for each business.
Professional Indemnity Insurance protects businesses that provide professional advice given for a fee, from the potential financially crippling and reputation damaging claims from dissatisfied clients due wrongful advice and/or errors arising from a breach of your Professional duty of care. When the pressure is on, even the most professional businesses can make mistakes or fall victim to unscrupulous employees. Professional Indemnity Insurance ensures a mistake doesn’t cost your business.
Any business providing professional advice, consultancy or specialist services for a fee, should consider the benefits of Professional Indemnity Insurance. This cover is not just for Professions such as Architects, Accountants, Solicitors, Surevyors, Mechanical or Civil Engineers. Many other Agents and services need Professional Indemnity cover should there be a breach of Professional duty i.e. Estate Agents, Management Consultants, Therapists and Therapies. In todays litigious society the consequences of an accusation of breach of professional duty could be very expensive to defend, and rultimately result in large awards where you are found to be at fault. In the Building and Engineering Inductry Collateral Warranties and Contract very often require Professional indemnity to be arranged for specific Contracts of a specific minimum limits of indemnity. Clauses may also be included requiring cover to be in place for periods up to 6/12 years. You should seek guidance from your legal advisor when taking on new Contracts.
It makes sense to seek guidance from an insurance professional on the level of Professional Indemnity Insurance appropriate for your business. The right amount of cover will depend on the risks facing your particular business as well as the value and impact of the services provided. importantly taking into account the Geographical area you work in and the jurisdictions applicable to contract
Professional Indemnity Insurance could protect your business from legal and other costs resulting from a variety of potential problems including:
It is for some professions (including solicitors, accountants, architects, insurance brokers and financial advisers). But for some businesses, operating without Professional Indemnity Insurance is simply not an option because of their level of potential risk. Some client organisations may also demand a minimum level of Professional Indemnity Insurance cover before they can consider working with a particular business.
It makes sense to seek advice from an insurance professional on the level of Professional Indemnity Insurance appropriate for your business. The right amount of cover will depend on the risks facing your particular business as well as the value and impact of the services provided.