Archive for the ‘combined liability insurance’ Category

Differentiating public, products and employers liability insurance.

Tuesday, October 4th, 2011

When looking at getting a business insurance quote, there are three types of liability cover that should be included, employers, public and products liability. You can get other types of liability insurance, but these three are the main ones available in the UK.

If you are just starting out in business, you may be looking for a quote and may wonder exactly what cover you need compared to cover that you must have. The must have category is employers liability, unless of course you do not have any employees. This may seem simple enough but please be aware that the definition of employee is very, very wide. This is deliberate in that insurers are no able to not pay out on a claim due to minutiae in the policy wording about what is and what is not an employee. There will of course be people that are not employees, such as third party contractors or bona-fide sub contractors, but in the main anyone that is working, “under your direction”, for you is deemed to be an employee. This can include work experience persons, people under short term contracts and even friends and family working for you on a short term basis.

The insurance industry is sometimes accused of scaremongering. What we like to do though is to simply let you know of the potential for a claim. Under employers liability we have seen, over the years, a few claims paid where there is such a tenuous link between the “employer” and “emploee” that it is always worth getting cover.

The law of the land says that you must have employers liability insurance cover with a minimum limit of indemnity of £5,000,000. Most of the commercial insurance companies will provide a limit of £10,000,000. If you are in any doubt as to what constitutes an employee, as it relates to your business, please speak to your accountant or even the Inland Revenue. You may be surprised at how wide the definition of an employee can be.

Now we come to the others, public and products. These two covers are not legally required, although you may find that many contracts (eg if you are working for a local authority) have clauses in insisting that you have cover in place. Public liability is if you cause any injury, illness, disease or damage on the course of your work. The roofer dropping a tile on someone’s car, someone slipping on water on the floor from a cleaners mop and someone tripping over a loose carpet in your shop are all examples of public liability claims we have seen on policies. The person tripping on the carpet would have put some of the most prolific divers on our football grounds to shame with the “injuries” they suffered and the money they actually received.

Products liability insurance goes hand in hand with public and covers any illness, injury, disease or damage caused by products you supply or manufacture. Again, there is no legal requirement for this, but you may be required to prove that you have cover in place.

Whilst we say that public and products liability are not legally required, please note that this is not to say that it is cover that a sensible and prudent business should ever go without. The problem with liability claims is that they are “once in a blue moon” events. But, when they do get to claim stage the costs are never small.

Many insurers will offer a separate combined liability insurance policy, giving these three covers together under one policy. As with every blog we have ever written or will write, you really do need to speak to an independent business insurance broker to get the best help and advice.

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Combined liability insurance – getting a quick quote

Thursday, February 24th, 2011

Technically, here in the UK, we are out of recession. This is defined as two consecutive quarters of negative growth. We had a dip at the back end of 2010 but not many people are expecting this to continue in quarter 1 2011. A lot of the problems at the end of last year were due to the weather and logistical problems.

But, having said all that, things are still pretty tough. No-one is naive enough to start talking about Norman Lamont’s “green shoots of recovery”. However, the corner has firmly been turned. Many businesses which were on the brink of failure, simply mothballed their operations until a later date.

We are starting to see many of these businesses now starting to look around for quotes, particularly combined liability insurance. This is the basic cover that many companies are asked to prove they have in force as they enter into or tender for contracts.

Getting a quote, and quickly, is usually the order of the day. Things are never easy and you usually never have enough time. So, if you are tendering and want to know the likely cost of any insurance, how do you get a quote as soon as possible?

The answer is to speak to a business insurance broker. Our role is to serve you and any broker worth their salt can usually give you an indication over the phone and a confirmed, written, quote within a few hours.

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Combined liability insurance

Thursday, November 18th, 2010

As an independent business insurance broker, people will phone us up, looking for a quote. Chances are they have been asked, or have read somewhere, that they need to have liability cover. But what is this and what do they actually need?

You can be liable in one of two ways, under civil law or under criminal law. What it means is that some action you have taken, or have not taken, causes injury, damage, illness, disease or financial loss.

There are, as we have said two types, your liability under criminal law could be for corporate manslaughter, whereas under civil, or common law, this could be if you, say as a plumber, damage someones house. Whilst it is not a criminal act, the householder could, if they choose, take you to court to get this rectified.

The three main liability covers are public, employers and products. These are usually put together as one policy, combined liability insurance. Where you are liable for financial loss, ie a solicitor incorrectly advising you, which leaves you out of pocket, this is professional indemnity.

So what do you do if you need this cover and do not have it in place at the moment? The simple answer is to speak to a broker. A broker has the ability to approach different insurers, rather than just go to one.

Depending on what you do, your turnover and wageroll and your claims experience can mean that insurer A does not want the business and will price themselves out of the market. Whereas insurers B and C are quite keen for the business and will price competitively. The only way you can know this, and get the best price AND cover, is to get a broker to scour the market on your behalf. Best of all, they do not charge for getting quotes.

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Combined liability insurance – what is it?

Wednesday, October 20th, 2010

Many businesses, as part of a contract with other companies or a government body, will be asked to prove the existence of combined liability insurance, but what is this and do you need it?

Under UK law (civil, not criminal) you can be liable for any damage you cause to other people, or other peoples property. When we talk about “other people” this includes businesses, corporations, charities etc, it does not have to be a private individual that says you are liable.

When we talk about “damage” this covers, injury, illness and disease. So not only is physical damage to property, ie the window cleaners ladder smashed through the bathroom window, covered, so is illness ie the butcher that supplied infected meat.

As long as there is physical damage then there could be a claim. Physical will also include mental illness. A standard business insurance policy can include any one of three separate types of liability cover. A combined policy, is a separate, stand alone policy, that covers the three liabilities in one.

These three are employers (legally required), public and products (which are not normally legally required). You may be asked to prove the existence of cover, because if you cause damage as a result of your contract, the “employing company” wants to be sure that they can claim against you.

Imagine a hospital, that needs some plumbing work done. They could get a local contractor in who could cause a fire and thousands and thousands of pounds of damage. The hospital is not at fault, but if the contractor does not have adequate insurance, it is the tax payer that ends up funding this. So, the local authority may have an approved contractors list, on this will be companies that can prove they have public liability at a limit of indemnity of, say, £5,000,000.

As with all types of cover, you get the best advice from an independent business insurance broker. If you don’t have the cover and need it, or you are looking for an alternative quote, a broker is the person to speak to.

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Business liability insurance – what does this mean?

Monday, August 9th, 2010

We get a lot of requests from people asking for business liability insurance. Usually, they have been requested as part of a contract they are working on, to arrange cover. There will usually be some form of document that they have been given which will ask numerous questions about the insurance they have in place.

But the question is, what exactly does this mean? Whilst every business in the land could potentially have liabilities that they will face which could be insured, there is no legal requirement upon them to have any form of insurance protection, except if they have employees.

Anyone who has ever run a business will know that there is a legal requirement to have employers liability insurance in force. If an employee gets injured, suffers illness or is diseased, and this is whilst under the control of their employer, then there can be a valid claim.

A common form of business insurance, is to combine the employers with public and products liability, to give you the business liability insurance. If you do not have employees, then you are quite entitled to say that this part of your contract does not need completion.

You will, in most cases though, need to have the other types of cover because, in 2010 and for the foreseeable future, more an more companies are insisting on anyone that works for them or supplies them with products or services, is going to need cover.

The best thing to do, is to speak to an independent broker, they can review, assess and recommend what types of cover you actually need and the cheapest way to get this sorted out.

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Public liability insurance – cover in isolation

Monday, July 12th, 2010

Depending on what you do, you may only require public liability insurance on it’s own. Many business insurance liability policies offer the three main types, public, employers and products.

These types of policies are typically called combined liability insurance. If you are a sole trader, for example a plumber, electrician or carpenter, you may not need the additional two liability covers. You do not have any employees, hence there is no need for employers liability insurance and you do not supply products (separately) so there is no need for this cover.

What you need to look for is a tradesman’s insurance quote, this will give you the option of picking one of two liability covers. Every tradesman’s policy must have public liability and you can, if you need it, add on the employees cover.

This is what is known as cover in isolation, it is on it’s own as a single policy. But what about the products liability? Although you are not selling products, in a retail or wholesale sense, customers do end up with products that you have supplied.

The good thing is, that tradesman’s or contractors insurance policies do automatically include products liability, as long as the product is supplied as part of the contract. So, the plumber that puts in a bathroom suite, has products liability for any injury, illness, disease or damage caused by the products on their own.

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Combined liability insurance

Friday, April 23rd, 2010

In a standard commercial insurance policy, you may have one or all three of the “standard” liabilities, employers, products and public liability insurance. If you have a claim made against your business, for example if a product you supply causes an injury, then you will usually have a valid claim under the products liability.

For products liability, you will have an overall limit of indemnity, usually £2,000,000, and this will cover claims totalling this amount in any one period of insurance. ie you can have four claims at £500,000 but not five, as this will exceed the limit. The cost of defending an action against you is also covered which is vitally important. These additional legal costs are paid in addition to the limit of indemnity. The main reasoning is that insurers want to be able to control the claim from the outset to ensure that only valid claims are settled.

The other two liability covers, public and employers liability, tend to have a limit of indemnity any one claim. So, under you public liability it can be five claims at £2,000,000 and for employers liability the minimum legal limit of indemnity os £5,000,000 so the potential cost could be huge.

These three liabilities are usually called the combined liability insurance if bought as a separate policy.

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Public liability – what if I am not liable?

Sunday, February 28th, 2010

Here in the UK, there was an excellent programme on Channel 4 on 25th February 2010 about the claims and compensation culture in the UK. Basically, if anyone slips, trips, falls or injures themselves, they feel that someone else should pay.

To protect yourself agains this, you purchase public liability insurance. The policy will pay, or settle, any action raised by a third party, where you have been proven to be negligent.

This last word is absolutely vital and key. If you are not negligent, you are not liable. The programme was good as it showed that local authorities are starting to fight back against the hundreds of claims they get every year.

If you do not have a separate policy, you may find that your umbrella or package policy includes combined liability insurance.

The good thing, if you are not liable, is that your insurers will deal with the claim on your behalf, within your cover. So, even if you think it is laughable that someone has the audacity to claim, you still need to refer to your insurers and let them deal with it.

Whilst you may not think you are liable, in certain cases you will be based on English law and past precedents. Never assume that just telling someone to go away is enough, solicitors can smell a big tasty fee from 500 miles and they will not let go.

Let your insurers deal with it, and if you are not liable, they will advise and deal with the third party accordingly.

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