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During the normal course of business, all small businesses are subjected to the potential threat of claims being made against them in respect of their legal liability; these losses may come from third parties or from employees of the company.
Losses can appear on account of property damage, personal injuries or as a consequence of monetary loss suffered by the claimant on account of negligent advice provided by the company.
The latter basis is the subject of professional indemnity insurance or professional liability cover and it's not the intention of the next few paragraphs to address these matters.
The prudent business owner or operator needs to ensure that they are protected against claims from third parties in respect of their legal liability for property damage or personal injury that has arisen out of and in the course of the business. This is the subject of public liability insurance.
A third party liability insurance policy provides the policyholder cover against their legal liabilities for property damage and personal injuries, where such loss is alleged to have been caused by the policyholder in the course of the business.
It is essential to note that a significant aspect of the public liability insurance policy is the inclusion of defence costs incurred in the defence of the claims, whether the action be found to be the liability of the insured or not. The costs of mounting a legal defence could be great, even in comparison with the cost of many claims, and it is a vital insurance protection for policyholders that it's included in the conventional policy coverage.
As third party liability insurance is a contract of legal liability, the fundamental policy wording remains similar from insurance company to insurer, however you will need to be aware of particular significant features of the policy to ensure that the cover meets the requirements of your business;
The Limit of Indemnity, this is the maximum amount of the insurers responsibility in respect of claims under the cover. This limit will likely be selected by you but will depend often on contractual requirements placed upon you by your employers.
The Business Description, it's critical that this accurately represents your company activities because it's only claims that occur from the undertaking of this business description and the insurance companies reasonable understanding of a trade or business activity that will be covered under the insurance.
Policy restrictions and endorsements, these are added to insurance policies to define the insurers responsibility under the policy for certain activities via perhaps limiting the types of work undertaken or by specifying the precautions that must be taken when carrying out certain work.
As with all insurance policies you should read the policy carefully to ensure that it meets with your requirements and you should raise any queries immediately with your insurance broker.
A business that employs people may also be subject to losses from employees for injuries or damage arising out of their employment. In the United Kingdom, this type of coverage is known as Employers Liability Insurance while it is referred to as Workers Compensation in the US and elsewhere.
Employers liability insurance is a compulsory insurance requirement for all employers inside the United Kingdom with a few exceptions that I cover elsewhere. The minimum limit of cover for an employers liability coverage is 5,000,000 although in practice contracts are generally issued with a minimum limit of 10,000,000.
Whilst third party liability cover is not a legal necessity, it should be considered an essential must for all in business, the good news is that the insurance is broadly available over the internet at extremely competitive premiums. A specialist liability cover broker will advise you in your requirements and instant quotations and cover are available for the overwhelming majority of businesses.
Losses can appear on account of property damage, personal injuries or as a consequence of monetary loss suffered by the claimant on account of negligent advice provided by the company.
The latter basis is the subject of professional indemnity insurance or professional liability cover and it's not the intention of the next few paragraphs to address these matters.
The prudent business owner or operator needs to ensure that they are protected against claims from third parties in respect of their legal liability for property damage or personal injury that has arisen out of and in the course of the business. This is the subject of public liability insurance.
A third party liability insurance policy provides the policyholder cover against their legal liabilities for property damage and personal injuries, where such loss is alleged to have been caused by the policyholder in the course of the business.
It is essential to note that a significant aspect of the public liability insurance policy is the inclusion of defence costs incurred in the defence of the claims, whether the action be found to be the liability of the insured or not. The costs of mounting a legal defence could be great, even in comparison with the cost of many claims, and it is a vital insurance protection for policyholders that it's included in the conventional policy coverage.
As third party liability insurance is a contract of legal liability, the fundamental policy wording remains similar from insurance company to insurer, however you will need to be aware of particular significant features of the policy to ensure that the cover meets the requirements of your business;
The Limit of Indemnity, this is the maximum amount of the insurers responsibility in respect of claims under the cover. This limit will likely be selected by you but will depend often on contractual requirements placed upon you by your employers.
The Business Description, it's critical that this accurately represents your company activities because it's only claims that occur from the undertaking of this business description and the insurance companies reasonable understanding of a trade or business activity that will be covered under the insurance.
Policy restrictions and endorsements, these are added to insurance policies to define the insurers responsibility under the policy for certain activities via perhaps limiting the types of work undertaken or by specifying the precautions that must be taken when carrying out certain work.
As with all insurance policies you should read the policy carefully to ensure that it meets with your requirements and you should raise any queries immediately with your insurance broker.
A business that employs people may also be subject to losses from employees for injuries or damage arising out of their employment. In the United Kingdom, this type of coverage is known as Employers Liability Insurance while it is referred to as Workers Compensation in the US and elsewhere.
Employers liability insurance is a compulsory insurance requirement for all employers inside the United Kingdom with a few exceptions that I cover elsewhere. The minimum limit of cover for an employers liability coverage is 5,000,000 although in practice contracts are generally issued with a minimum limit of 10,000,000.
Whilst third party liability cover is not a legal necessity, it should be considered an essential must for all in business, the good news is that the insurance is broadly available over the internet at extremely competitive premiums. A specialist liability cover broker will advise you in your requirements and instant quotations and cover are available for the overwhelming majority of businesses.
About the Author:
Blackfriars Group is a long established liability and business insurance broker in the United Kingdom providing a fast and cost effective service in the arrangement of liability insurance for clients engaged in a wide range of occupations, businesses and activities and providing instant access to quotes from leading insurers at the liability insurance site.
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