Boothby Taylor Blog
Why You Need Employers Liability Insurance
Whatever the size or nature of your business, managing and mitigating risk is a big part of any harmonious operation. Businesses of all shapes and sizes do well to prepare for the worst while hoping and planning for the best. Risk management is a broad and multifaceted discipline, incorporating a number of checks and balances. As well as ensuring compliance with relevant legislation (e,g. Health and Safety, Employee Legislation, Workers Rights etc.) and ensuring operational practices to keep themselves compliant, businesses must also invest in appropriate insurance cover to meet their needs. This can provide vital protection against claims against them which could potentially decimate cash flow and grind operations to a halt.
Some small businesses are “solopreneurs” who do not have a workforce. However, if your business employs anyone it has a legal duty to take care of their interests while they are working for you. As well as ensuring a safe and comfortable working environment and providing them with a pension, you also need appropriate insurance cover to protect them while they’re doing their jobs.
That’s where Employers’ Liability Insurance comes in...
What is Employers’ Liability Insurance?
Employers’ Liability Insurance is a policy that protects your workforce in the event of their falling ill or being injured as a result of doing their job. When this happens, the employee is entitled to make a claim against you for compensation, medical expenses and legal fees. Employer’s Liability Insurance helps businesses to do right by their employees when they are responsible for their illness or injury without paying millions of pounds out of their own pockets.
Most policies provide standard cover of up to £10 million. As you can imagine, if an accident occurs where multiple parties are injured, the costs could decimate most SMEs.
Is Employers’ Liability insurance a legal requirement?
Unlike Public Liability Insurance which covers members of the general public who are injured on your premises,
Employers’ Liability Insurance is a legal requirement in most cases. That said, there are some exceptions. For example, it is not legally required if;
You are part of a public organisation, nationalised industry or health service organisation
You are the only employee and own 50% or more of the company’s share capital
You have a family business which is not set up as a limited company
However, it’s worth noting that even if Employers’ Liability Insurance is not a legal requirement for you, that doesn’t mean that it isn’t pertinent or appropriate.
What happens if you don’t have Employers’ Liability Insurance?
If you are legally required to have Employers’ Liability Insurance and do not, it could result in serious consequences.
Even outside of the expense of a compensatory award for injured parties.
The Health and Safety Executive (HSE) enforces the law on Employers’ Liability Insurance and uses inspectors to check that businesses have the appropriate cover. If your business is found to be non-compliant it could face a fine of up to £2,500 for each day you do not have suitable cover.
Make sure your employees and your business’ reputation are protected!
Why You Need Public Liability Insurance
When you run your own business, your reputation is everything. And it’s governed by more than your brand building and marketing activities. Even your constant striving for operational excellence isn’t enough to cement a flawless reputation. You also need to have comprehensive risk management strategies that will help you prepare for the worst even as you plan for the best. And a big part of this is ensuring that your business has the right insurance cover. If your business comes into physical contact with other members of the public, there’s an excellent chance that you need Public Liability Insurance.
What is Public Liability Insurance and what kinds of business need it?
Public Liability Insurance protects your business from liability in the event that someone is injured on your premises. It is a popular choice among all kinds of businesses with a physical premises. Stores, cafes, bars, restaurants, salons and spas will usually be covered by Public Liability insurance. However, even if you have a business without a physical premises (like a mobile hairdresser, builder or pet groomer) you will still benefit from this form of insurance because there’s still a risk of causing injury to others, however careful you may be.
Why does my business need Public Liability Insurance?
If someone injures themselves on your premises it can not only be a PR disaster, it can leave you seriously out of pocket. If someone injures themselves on your premises they may take legal action and could sue you for compensation, legal fees and (where appropriate) medical expenses.
There are few SMEs that could foot the bill for this without appropriate insurance cover. Public Liability Insurance allows you to do right by injured parties without decimating your business’ finances, helping you to avoid a disaster that could force you to close your doors.
Is Public Liability Insurance a legal requirement?
There is no legal requirement to take out Public Liability Insurance. However, while not a legal obligation, it should absolutely be considered essential. Without it you could be forced to pay compensation to injured parties out of your own pocket, not to mention a potential fortune in legal fees. While all SMEs are conscious of overheads, the cost of a policy pales in comparison to the costs incurred if you aren’t covered.
Are there any non-business uses for Public Liability Insurance?
There are many who take out Public Liability Insurance for non-business uses. For example, some use it to cover private parties at external venues. That way, if they or one of their guests causes accidental damage to the venue, the costs can be covered without leaving them out of pocket. For the same reason, a lot of people use Public Liability Insurance to cover their weddings, especially if they take place in prestige venues.
Ultimately, the choice of whether or not you need Public Liability Insurance rests with you. But it’s worth considering whether you could cover the cost of not having it if a claim is made against you or your business.
Why You Need Business Insurance
So, why do you need business insurance? Well, the short answer is protection. There is, of course, a longer answer and several reasons that you need business insurance. We will look at the different types of business insurance and look at why they are important, and even point out which ones are a legal requirement.
Business insurance is there to protect you in situations where you could be facing liability or financial loss. The insurance covers you for various scenarios and depending on the type of business you have and the operations of your business, you might need to spend some time looking at the different insurance coverages. Boothby Taylor can take that headache away and help you get the right level of protection. Insurance is there to cover the cost of financial loss, lost income, business interruption, the business premises, the employees and visitors to your business, and more.
It doesn’t matter if you are a small business or large business or even if you work from home. You will need business insurance. The only variation is the type of insurance you need to protect yourself and your business in case the worst were to happen.
So, what are the different business insurance policies you might need?
Employers’ Liability Insurance
For most businesses, employers’ liability insurance is a requirement by law. If you employ one or more members of staff, then you are legally required to have employers’ liability insurance. It applies to employees, apprentices, temporary workers, contractors, and volunteers.
It is there to protect your business in situations where an employee raises a claim against you. The protection is for where the claim is due to an injury as a result of their work or because they became ill as a result of it. Find out more about Employers’ Liability Insurance.
Public Liability Insurance
While it is not a legal requirement, it is a good idea to have Public Liability Insurance. It protects you against claims from a third party, such as a client or member of the public who are injured as a result of your business activities. Get more information about Public Liability Insurance.
Professional Indemnity Insurance
Again, this is not a legal requirement but a good idea to have. Professional Indemnity Insurance covers you against the cost of claims and legal action taken against you for negligence or a mistake. Given the broad scope of claims that could arise including intellectual property infringement, defamation, loss of data, etc. it is a good idea to get protected. Learn more about Professional Indemnity Insurance.
Essentially, you need business insurance because without it, you, as business owners, will be liable for the legal costs, legal fees, and compensation costs that result from any claim against you. Even if you win the case you will still need to pay legal costs and foot the bill for fighting the claim. There are other insurance policies that you might want to investigate, for example, Cyber Security Insurance, Office Contents Insurance, and Buildings Insurance if you own the business premises.
Make sure you are protected and speak to Boothby Taylor today. We are a trusted independent insurance broker, based in Chelmsford, Essex. For over 20 years we have been providing commercial business insurance.