If you operate a SME business, whether it is just you as a sole trader or if you employ a handful of staff, the securing of a suitable policy is a matter of absolute common sense rather than a necessary evil.
It is unlike employers’ liability insurance, which covers damages, injuries and illnesses caused to your staff as direct results of carrying out their working duties on your behalf. Public Liability policies serve much the same purpose in relation to anyone not employed by you.
Considering this in real terms, whether you run a small office based business, a plumbing outfit or a hairdressing salon, think about the customers, external contractors, members of the public and suppliers you cross paths with on a daily basis. Whether they are on your premises, you are on their premises or your are both on neutral territory, the amount and nature of incidents that might potentially occur are almost unimaginable.
Even if you work entirely remotely from home, there are likely to be occasions when you have to meet with customers or engage with members of the public. If you make or send deliveries to customers, minor as it might seem you could be at risk of claims being brought against you a recipient injures themselves on careless packaging.
Liability insurance is not for you or the employees working for you. It is a non-obligatory standard by which you can benchmark the health and safety measures you apply to your business. Much moreso, it is your financial assurance that you are adequately and legally covered if claimants bring cases against you for damages to their property, personal injuries and illnesses that are considered to be the fault of your business.
It is also worth bearing in mind that policy cover can do you an additional service when pitching for contracts. Most Local Government tenders now require successful candidates to have liability cover as a prerequisite to them even being considered as potential suitable suppliers. Amidst a no win no fee environment, many private sector procurement professionals have accordingly followed suit.
What Is Covered By Small Business Liability Insurance?
Standard policies generally cover £5million worth of damages and costs that your business might be deemed liable to pay out in cases of successful claims caused by a lack of due diligence by you or your representatives. Sectors and sizes of businesses dependent, many policies cover larger indemnity amounts of up to £10million.
Other occurrences that are perhaps not so immediately obvious as accidents, damages and illnesses are also insured against with liability cover. If the nature of your business involves goods in transit, there is the distinct possibility that, at some point, you might experience damages to, loss or theft of goods whilst they are en route between the point of dispatch and their ultimate destinations.
Likewise, you might have occasions when the services you fulfill for your customers require you to hire in equipment from third party suppliers. Should such hired equipment become damaged during the course of your duties, get lost or be stolen from you, it is only natural that your supplier will look to recoup their costs from you.
What Sorts Of Typical Claims Are Brought Against Small Businesses?
Claims against small businesses cover a diverse spectrum of scenarios that can range from minor cuts and falls, food poisoning, broken bones through to serious handicaps, terminal illnesses, even fatalities.
If you work on site with your customers at their premises and accidentally spill a drink over their computer equipment, your customer is within their rights to bring a damages claim against you. If you are a carpet fitter and, after completing a job in a customer’s home, they trip and sprain their wrist on a piece you left loose, you can expect a claim to land on your doorstep.
Supposing you run a hairdressing business, either at your shop or on a mobile basis. Should you accidentally nick a customer’s ear with your scissors whilst giving them a trim or singe their neck with an overheated hairdryer, they might well commence litigation against you.
For tradesmen who carry out the likes of building or electrical work, potential damages to customers’ persons and properties sound not quite so flippant. Scaremongering aside, you will have read of cases in the press and even seen cases on TV of claimants being awarded damages running in to multiple thousands of pounds for severe damages to both property and health.
What Happens If You Do Not Have A Public Liability Policy?
If you do not have liability cover, you might just be lucky and get away with it, as there are no guarantees that your business will ever be held responsible for damages, injuries or illnesses. Likewise, there are no counter guarantees that it will not. Failing the ability to predict the future, many small business owners, like yourself, err on the side of caution in order to avoid regret.
Imagine that the worst comes to the worst, an unexpected incident happens and a claim is brought against your business. If you are uninsured, your business will be liable for Solicitor’s fees and also Court and Barrister’s fees if the case develops in to trial. If the Judge rules against you, your final bill will also encompass the compensation amount you are ordered to pay to the claimant, any medical costs they have shouldered in cases or accidents or illnesses, plus their legal fees on top of your own.
If you are insured, your Insurance Company and their legal representatives will broker the information on your behalf. All of the legal costs incurred in fighting your case will be covered for you by your Insurer. If you lose the case, the claimant’s compensation and legal fees will also be paid for you under your policy cover.
If it sounds like a no-brainer, that is because it basically is. When referring to your small business, that small business is quite probably you – the disastrous consequences of being uninsured and losing a case need little spelling out.