Public Liability insurance and Product Liability insurance are voluntary for most business types but are worth serious consideration for your business as both could save you from financial ruin should a claim be made against you.
Public Liability Insurance
Public Liability Insurance will cover you and your business against any claims if you and your business are held liable for a member of the public’s personal injury or damage to their property.
This type of liability insurance is designed to pay compensation to the claimant including loss of earnings, future loss of earnings and damages awarded. It will also help to cover the cost of legal fees in the process of defending the claim, as well as cover the claimant’s legal costs that you incur if you are found to be at fault.
Public Liability insurance is also a consideration if you work from home and your clients often visit you at your home office. A client could injure themselves while they are on your premises and can then claim against you for any injury caused.
Public Liability insurance can also cover you if you work regularly offsite – such as on a sales visit or working on a construction site – as well as on your business premises.
The level of cover will depend on the type of business and the number of employees that you have working for you. It’s important not to underestimate your cover value. Cover is available from £1 million, £2 million and £5 million and, upon request, for higher levels subject to insurers terms and conditions.
As a business size increases and the number of employees increases, you are also likely to find that risks grow too.
Products Liability Insurance
Product liability insurance covers you in the event that a product you make or supply causes damage or injury to a person or property.
Products liability is required if you have manufactured a product – including food and drink – or are selling a product that has been manufactured by another company if the company cannot be clearly identified. You will also be responsible for any products you change or repair, or any product that is brought into the UK from outside Europe.
A minor defect could open you up to large claims. A claim can be made against you if you are:
- The producer of the product or the manufacturer
- Any person putting their name, brand or mark or purporting to be the producer of the product
- Any person who has imported the product into member state from outside the EU
- Any person who repairs or reconditions the product
- The supplier of the product
If a claim is made, a chain is formed from the making of the raw material right through to the finished product and the courts will track the product back to the source of a problem in a claim process.
If there is a break in the chain or if the courts feel that the prospect of a satisfactory remedy is remote – such as dealing with an overseas supplier from a developing nation – the action could then lie with the importer of the goods or even the shop that is selling the product.
Products liability will safeguard you against safety claims, manufacturing quality, spoilage costs, and any other unforeseen circumstances.