The price of Liability Insurance very much depends on what type of small business you are running, what levels of cover you take out and your trading history. Public Liability and Employers Liability often come together as a package policy however it will be cheaper if you can take out Public Liability in isolation, for example if you are a sole trader.
Do I need insurance for my small business ?
All businesses should carry some type of commercial insurance to protect themselves and others around them, but it is not always a legal requirement. If you have any employees however then it is a legal requirement to carry Employers Liability insurance.
The category of trade in which a small business falls into will affect costs. The premium rates are based on the perceived risk to injury, so a woodworking machinist (high risk) would be rated higher than an office worker (low risk) at the same company.
Liability Insurance discounts are offered the more experience a business has. Those that have been trading for several years with experienced workers and have a good insurance history (no claims), will often enjoy cheaper premiums. Insurance for new start-up business can at times seem costly but the more years trading and experience that can be shown will help premiums get cheaper.
How much insurance do I need for my small business ?
Small businesses often question how much insurance do I need? The common answer is, unless a regulatory authority is insisting on certain amounts then really is up to the business owner to decide. Employers liability will always be a minimum cover of £10,000,000 however public liability levels of cover is the business owner’s choice. Using a commercial insurance broker will help you asses your risk and decide upon what is usually thought to be sufficient. Cover can be increased at any point in a policy year.
Public and employers liability insurance
Public Liability covers compensation for injury or accident to a third-party persons or property as a result of your negligence. For example, if a builder is carrying out works on a property and a member of the public is to trip on building material that isn’t secured properly, then compensation would be paid for any injuries to that person. The limits of cover usually start at £2,000,000 and can be increased to £5,000,000, with some insurers £10,000,000. The price of the policy will vary dependent on what level of cover you take.
Employers Liability is very similar however this is for accident or injury to an employee or person you are responsible for in the work place. The level of cover is standard at a minimum of £10,000,000. Higher limits can be purchased although this is rare. There is sometimes confusion because the Employers Liability certificate shows a minimum of £5,000,000 but this is because cover is limited to £5,000,000 where terrorism is a factor. An “employee” is any person that you are responsible for; full-time, part-time, a volunteer, an apprentice or a work experience student. There are some but very few exceptions.
Please talk to one of our advisers, who will guide you through what is available and give you the information that you need to make a decision. Call 01442 242400 or make contact here today.
