Employers Liability
Most businesses with employees have to have at least £5 million of cover in place, it’s a legal requirement.
It will cover the cost of defending or settling an employee’s claim where they have suffered bodily injury or disease as a result of work they do for you. And that includes the use of motor vehicles to carry out the policyholder’s business: but may also include recreational activities as well such as sports clubs and dining facilities.
It will also cover the cost of defending a related criminal prosecution if the accident or disease came about because of a legal or regulatory breach.
Prescribed certification is also a legal requirement to show employees that appropriate cover is in force to protect them. A big part of that protection centres on a legal principle known as strict liability and that means the policyholder is prima facie responsible for any reasonably presented allegation; unless proven otherwise.
Policies are rated according to risk relative to categories of work involved in your business. Each category has its own rate applied to the category payroll. Declarations of payroll are submitted at the end of the policy year to adjust the premium.
Some companies are now paying consultants to work instead of PAYE employees. This could still implicate the Employers Libility regime and should be disclosed to any interested insurer.
Public Liability
Often times referred to as Third Party Liability this protects the policyholder from claims made against it by aggrieved parties who are not classed as employees and who allegedly have suffered loss:damage or injury. This criteria exempts claims for professional indemnity losses which are almost exclusively financial and for which a separate policy is needed..please see Professional Indemnity Section.
Public liability cover is not actually a legal requirement, but of course businesses still need it and trade associations call for it.
Most claims get settled out of court and well within the chosen limit of indemnity; however the limit should reflect possible catastrophies especially on identifiable exposure to other peoples welfare.
A minimum limit should be £2million but realistically £5 million.
A specific extension is required for liability arising from products please see underneath.
Products Liability
This insurance protects you in the event that your product causes injury or damage to a Third Party person or their property. You could be liable to pay compensation in these circumstances even if you didn’t manufacture the product, and the costs can be severe.
You might also be liable if your business:
- Name is on the product
- Has repaired or made changes to the product
- Imported it from outside the EU
- Can’t clearly identify the manufacturer, or even
- If the manufacturer has gone out of business
Because products can end up in areas all over the World it is important that the insurers know the intracies of your marketing and regulate the policy by conditions concerning the Jurisdiction into which claims can arise.
North America is still rated very highly but specific State marketing may help the rating.
The premium rate is determined by product type [especially in relation to health and diet] and applied to the policyholder’s turnover value with estimates adjusted at the policy year end.
Product Liability insurance has to be in force when a claim is made unlike general Public Liability claims where the policy has to be in force at the time of the accident.
Own or Self-Losses can arise when own or competitors products involve a recall for which a separate Product Recall policy is required.
