If you are running a business then you will need to have insurance because, without it, your business, and thus your livelihood, is at risk. You can spend years building the business that supplies you and your family with security, only to lose everything in a matter of moments because you do not carry the necessary insurance to protect you against an unexpected accident or loss.
Although there are some forms of insurance that any business is required by law to have, such as Employer’s Liability Insurance, most forms of insurance are purely voluntary. It is entirely up to you, for example, to decide whether to insurance your business premises against such things as damage or destruction by fire. Similarly, you must decide whether you wish to ensure your stock against loss or damage, and the cash you hold within the business against theft. The fact that you have this choice will probably seem quite reasonable to most people, but the majority of people would quite possibly be surprised to learn, that it is also up to you to decide whether or not to cover your business for its public liability.
If that sounds complicated, what it really means is that, if a member of the public is visiting your business premises, and trips and falls over some items of stock that were not properly stored, but were simply left on the floor in a walkway area, the member of the public concerned could submit a claim against you for any injury sustained by the fall.
Similarly, let us assume that you operate an electrical business, and that one of your employees has been sent to a client’s meat packing premises to carry out some re-wiring. While carrying out the work, your employee does not wire a fuse box correctly and, as a result, several circuits to the customer’s bank of meat freezers are burnt out, resulting in the loss of several thousands of pounds worth of meat. Your client will almost certainly file a claim against you for the damage done to the electrical circuits, and for the loss of his meat.
A public liability policy will normally meet the cost for any damage caused or, in the case of injury, the cost of any medical fees. It will also cover you for the legal and court costs that are often associated with claims of this nature, as well as for any related expenses that events of this nature can often generate.
One important thing to remember is that public liability insurance covers your business when an incident takes place on your own business premises, and also covers you for an incident that takes places on a client’s premises, when that incident involves one of your employees.
Whether or not you need public liability insurance will depend to a large extent upon the nature of your business, and the risks that you run within your business. For some businesses risks will be very low, and the chances of finding yourself facing a claim for injury or damages are not very high. For other businesses, such things as a high level of contact with members of the public, or the regular use of hazardous equipment on your client’s premises, mean that you do need insurance cover. Indeed, in this case, it is more a matter of when someone is going to present you with a claim form, rather that if you are ever likely to actually see a claim form.
One other very important consideration is the liability that you could be facing should a claim be made against you. There is no hard and fast rule here of course, but a serious injury to just a single individual could easily result in costs running to £1 million, or more. It is not uncommon for even relatively small businesses today to consider the risk to be high enough to carry £5 million, or even £10 million, of cover.
Public liability insurance is a relatively small business expense, and public liability insurance quotes can be obtained from a large number of insurance providers in the UK like AXA Business. Whether or not you decide to arrange this particular form of business insurance is up to you, but remember that failure to meet this cost could literally spell the end of your business, in the event of even quite a small incident.
Written by: Shannon James took a placement at one of the largest accountancy firms in the world immediately after university, Shannon then went on to found a company and started investing in property. This has given him an wealth of knowledge regarding all types of business & personal insurance.