There are two main reasons why you would be looking, or have a need, for a commercial liability insurance quote.
Firstly, because you are being a sensible and prudent business person who realises that there is a legal requirement for certain liability covers and others you really should not trade without.
Secondly, you are undertaking a contract for a third party and they have insisted that you complete a contractors declaration form giving information on the cover you have in place.
In reality, it will be a combination of the two for most people, with a heavy emphasis on the first. Most business people understand, for example, that there is a legal requirement to have valid employers liability insurance in force, if you have any employees. If you trade without it not only are you potentially facing a huge claim if an employee is injured, you can get hit with a £2,500 fine per day, that you do not have the cover.
So, you have spoken to a commercial insurance broker and got yourself either a quote or a policy. But how do you know what levels of cover you need?
Liability insurance comes in limits of indemnity. This is the amount of cover that you may possibly face in respect of any one claim. For employers liability, the law says you must have a minimum limit of indemnity of £5,000,000 any one claim. Insurers will normally give you £10m, this is why your certificate will show £5,000,00 and your schedule will show £10,000,000.
As far as public and product liability is concerned, you can get various limits of indemnity, most quotes you will find are for £2,000,000, you can get £1m, or £5m if you ask. Limits in excess of £5m are avaialable, but this is more specialist cover.
If you have been asked to ”prove” this cover, through a contractors form, this will usually state not only the types of cover you need, but also the limit of indemnity required.
If you do not have the cover at this limit, but have a live policy, then speak to your broker about getting the right cover in place.