Business Liability Insurance Explained

If you run a business in the UK, you are, in most cases, required by law to have some form of business liability insurance. It is usually made up of several different types of insurance that are bundled into one policy, and any of these elements may be required. Typically a policy will include some or all of the features below:

• Public liability insurance will cover you for costs associated with injury to a member of the public as a result of your actions. It can cover people visiting your premises, or incidents that occur when you are carrying out work on other peoples premises. It will also cover your associated costs, such as legal fees or the NHS reclaiming the cost of hospital treatment;
• Employers' liability insurance will be required if your business has any employees, including yourself if it is a limited company and you are the managing director. It covers you against compensation claims made by or on behalf of employees who are injured or made ill in the course of their work;
• Product liability insurance protects you against damages paid if a product you supply, manufacture or refurbish is responsible for injury to people or damage to property. It could also cover any associated legal costs;
  Professional indemnity insurance means that your business is protected against claims that you have damaged another business or caused them to make a financial loss through a mistake or negligence;
• Tax & VAT investigation insurance reimburses you for the cost of an investigation by Revenue & Customs. At first glance it doesn't appear to offer a huge benefit, but an investigation could seriously affect your business and its income as you may have to pay your accountant additional fees, or even legal fees.

The cost of the business liability insurance will depend on the type of industry your business is in, the size of it and the way it is organized. As these policies cover a number of different areas, you should get advice from an insurance specialist before buying. This will ensure that you get business liability insurance that fits your requirements, covering those areas which are relevant but not having you pay for cover which is not needed. A specialist intermediary is also more likely to be able to provide a tailored policy than a large organization that takes a 'one size fits all' approach, possibly resulting in a more competitive premium.