Public and Employers Liability Insurance

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Why should I get Public Liability insurance?

In the current day and age with a wavering economy and uncertainty about our countries financial stability, we are noticing an alarming upward trend in insurance claims as a quick win for claimants to receive a lump sum pay out. Not only are a lot of claims largely exaggerated to defraud insurance companies out of additional money (whiplash for example), but some are entirely falsified even insofar as individuals running illegal operations in the form of “crash-for-cash” scams that cost the insurance industry billions each year.
For a long time Public Liability insurance was considered very laissez-faire, with little concern paid by business owners; however in the current financial climate, it is becoming increasingly risky to not have the insurance in place. If we consider travel insurance for a moment, there has been a significant amount of news coverage in the last twelve months regarding the sudden surge in claims since travellers realised it was relatively simple to exploit the policies.

How do fraudulent claims affect my businesses?

These figures are indicative that customer’s aversion to making fraudulent claims is lessening, and as a result more and more people are willing to take the risk of making false allegations in exchange for a quick financial settlement.

As a business owner, this should really drive home the potential disaster waiting if you do not have Public Liability insurance; it is no longer a case of “peace of mind”, it is more an essential policy to protect you for claims either legitimate or fraudulent.

For the year 2015/2016 the volume of fraudulent liability claims rose by 36% compared to the previous year. The estimated cost of the fraudulent liability claims was over £390 million with approximately 26,900 incidents detected.*

What does Public Liability actually cover?

Public Liability insurance is designed to protect you from claims involving members of the public. The types of incidents the liability insurance covers are those that involve an injury or a financial loss (commonly damaged property) as a result of an accident or negligence.

  • A customer slips or trips inside your premises and injures themselves.
  • A customer receives an electric shock, burn or poisoning whilst at your premises.
  • A customer is struck by a falling object/fixture whilst at your premises.

These are all common examples of claims that are covered under a Public Liability policy and would otherwise cause all manner of headaches, stress and financial losses for the business owner; it is also important to consider the interests of the public and ensure that you are able to compensate them in the event a legitimate incident occurs that causes them harm or loss. Public Liability insurance will also offer cover for any damage caused to a third parties property whilst you are at their premises.

  • Whilst making a delivery to a property you accidently smash a window.
  • Whilst at a property you inadvertently knock a television over and break it.
  • Whilst at a property you unintentionally tear their carpet with your equipment.

Public Liability is designed to keep your business running smoothly and to ensure that in the unfortunate event you face legal action as a result of injury or financial loss a customer has incurred as a result of your oversight or negligence, you can rest easy knowing your business and livelihood is protected.

Best of all, Public Liability insurance is very competitively priced, even when you go through an insurance broker such as ourselves who can also discuss your requirements and ensure the cover provided is sufficient.

Do I need Employers Liability?

If you have any employees, even just the one, chances are you a legally required to have Employers Liability insurance under the Employers’ Liability (Compulsory Insurance) Act 1969. There are some exemptions for requiring the cover, although these focus more around company shares, relatives and limited status. Where Employers Liability is a legal requirement, you will typically need a minimum cover level of £5 million.

The purpose of Employers Liability is to protect your business from financial loss in the event an employee is injured or becomes ill as a result of working for you/your company. The cost of compensation paid out on employers liability claims is around £2.3 million per day, and the cost of liability claims in general sitting at £7.7 million per day.*

What does Employers Liability cover?

The most simple explanation would be that Employers Liability relates to Health and Safety at work. Where an employer does not take reasonable precautions or measures to minimise or prevent accidents or incidents, an employee who suffers as a result can claim compensation. Most of the common claims made under Employers Liability policies relate to lifting heavy objects, slips, trips, falls, electric shocks and chemical injuries.

Having Employers Liability will not excuse you from undertaking the necessary risk assessments, or allow you to take shortcuts on enforcing health and safety measures; if an insurer finds you in breach of your legal responsibilities and determines this is a factor in the claim, they may sue your company to reclaim the compensation costs.

Employers Liability cover usually begins at £5 million, however most insurers will actually offer cover upwards of £10 million in most circumstances. It is important to ensure you understand your risks and liabilities when determining how much cover you require. Aside from Dual Capacity claims that do not really directly affect most Fleet operators, other classifications of claims can apply:

  • Intentional torts where an employer disregards a health and safety issue and resultantly causes a loss for their employees. An example of this would be knowingly allowing an employee to use a defective vehicle which then results in an injury such as a badly worn tyre that results in a blowout, or loose wiring that results in an electric shock.
  • Third party cross claims where an employee claims off a third party who then counter claim against the employer if they consider the issue their fault. An example of this would be if an employee has an issue with one of your fleet vehicles and tries to claim off the vehicle manufacturer, however the vehicle manufacture counter claim against your fleet company for failing to maintain the vehicle sufficiently as “contributory negligence”.
  • Dual capacity claims where an employer also provides services or products which are involved in causing an accident/loss for an employee who can they claim under Products Liability in addition to Employers Liability.
  • Health issues/diseases related to working in a particular profession are commonly claimed for under Employers Liability, such as mesothelioma caused by asbestos dust. For Fleet operators a more prudent example would be posttraumatic arthritis or other musculoskeletal disorders caused by overexertion during loading processes.
  • Loss of consortium claims relate to legal action against an employer most often by their employees spouse. The claim is intended to compensate where a workplace injury or illness directly causes the loss of spousal services such as companionship and associated activities, or even simply help with household or parenting duties.

Employers Liability is an important aspect of running a financially protected company that can provide adequate compensation to its employees in every eventuality. We would recommend that every company regardless of size considers the benefits of Employers Liability insurance, even where it is not a legal requirement.

With an insurance policy that can financially protect you against potentially millions of pounds worth of claims, you would be forgiven for expecting Employers Liability policies to cost hundreds of pounds. In truth, Employers Liability insurance is very reasonably priced and a product that Connect Insurance are happy to provide you a quote for ensuring the cover provided is sufficient.

*https://www.abi.org.uk/globalassets/sitecore/files/documents/publications/public/2016/keyfacts/keyfacts2016.pdf

**http://www.hse.gov.uk/pubns/hse40.pdf