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Does my business need liability insurance?

Running your own business will always involve an inevitable element of risk. Although some of these uncertainties cannot be avoided, the insurance industry can provide an important bulwark against specific risks. Public liability insurance and employers’ liability insurance are two products that every employer should consider. In certain situations, liability insurance is a legal requirement.

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Public liability insurance

This covers an employer and their business against any damage, loss or inconvenience caused to a customer in the course of the conduct of the business. It covers compensation claims, legal expenses, medical expenses and the cost of repairs.

Employers’ liability insurance

This provides cover for an employer and their business against the risk that an employee is injured in the course of their work for the business. It is a legal requirement for almost anyone who becomes an employer. The only possible exceptions are for those business owners that only employ either a member of their own family or someone living abroad. The UK government provides further information to help employers assess potential liabilities but, as a minimum, an employers’ liability insurance policy must:

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– provide at least £5 million of coverage

– be provided by an insurer authorised by the Financial Conduct Authority.

The financial risk of not holding employers’ liability insurance is not limited only to the possibility of a claim. Business owners without the correct insurance are liable to a government-imposed fine of up to £2,500 per day for every day that the business remains without insurance. Failure to display a valid employers’ liability insurance certificate or to make it available to government inspectors may also attract a further £1,000 fine.

How to take out liability insurance

One of the easiest ways is to contact a specialist broker. These operate throughout the country and have in-depth knowledge of different business sectors. You can choose from national brokers or one that operates in a particular locality, for example, a commercial finance broker in Gloucestershire such as http://www.choicecommercialfinance.co.uk/. Either way, whether locally or nationally-based, a good independent and impartial broker will provide straightforward, no obligation advice. They will also give you access to hundreds of financial institutions spread throughout the UK.

Before taking out insurance, it is sensible to compare a number of quotes to ensure you are choosing a policy that is both competitive and provides the necessary levels of cover.


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