2016-08-26

Liability insurance is the minimum cover that all businesses, big or small, should have. But how do the different forms of liability insurance differ, and what exactly does this cover? Find out here.

The Different Types of Liability Insurance

Public Liability - This covers accidental property damage or injury to customers and/or members of the public caused by your business. For example, if someone trips, falls and hurts themselves because a water leak was not cleaned up immediately.

This policy will also cover the cost of any legal expenses or compensation that occur as a result of said incident. Cover ranges from £1million to £10million depending on the size of your enterprise.

Employer's Liability - You must have this cover by law. It covers injury of staff caused by your business and any compensation or legal costs that occur as the result of such accident/illness.

For example, older employees begin suffering with chest problems due to years of working with dangerous materials without the correct safety equipment.

Product Liability - This provides protection should injury or public damage be caused by a product that was either manufactured, supplied, installed or maintained by your company.

A great example of this is the recent recall of thousands of hover boards that appeared to be spontaneaously catching fire.

Director and Officer's Liability - Protection should any claims be made against a business' director or a company's senior staff in particular.

For example, if a business loses business and money as a result of a bad decision made by the director that the shareholders did not approve.

Professional Liability - Also known as professional indemnity insurance, this covers your business for any advice it may give in a professional capacity that a client believes did not produce work to a professional standard.

For example, you give investment advice which results in the client losing considerable amounts of money.

Why Should You Have Liability Insurance?

Whether required by law or not, liability insurance is an essential business outgoing. Not only will it ensure an injured individual is supported should they get into an accident that is your company's fault, but it will make sure minimal disruption to your business. Without it, one successful, large compensation claim could put a company out of business.

Liability insurance will also show that you have your customer and staff safety in mind. In fact, many business deals require you have liability insurance as a contractual obligation.

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Learn more about liability insurance and compare cover quotes online at a click of a button here.