Liability Insurance

Accidents may happen, things may go wrong, and your judgment and advice might fall short of your usual standards from time to time.

One any of those occasions, the individuals affected – whether physically or financially – are likely to cast around for someone to blame. Since the negligence may be down to you, you might want to consider the benefits and protection afforded by liability insurance.

What is liability insurance?

What is liability insurance?

The general term liability insurance recognises one of the principal tenets of English law known as the “good neighbour principle” – essentially, an obligation on each of us not to do something, or fail to do something, which any reasonable person realises might injure their neighbour.

In this regard, there is a duty of care towards those around us – whether at work or not – and any breach of that duty of care may give the injured party the right to claim compensation from you.

Liability insurance is designed to indemnify you against the – potentially considerable – financial risk.

What does liability insurance typically cover?

What does liability insurance typically cover?

Although the principle remains the same – to provide you indemnity against claims of negligence in your duty of care – there are a number of specific areas which liability insurance is designed to tackle:

  • public liability – this type of liability insurance is perhaps the most general and widely used, safeguarding property owners, businesses and individuals from claims by any member of the public who suffers injury or damage to their property as a result of some action, or failure to act, on your part. Indemnity commonly starts at £1 million, but may be considerably more;
  • employers’ liability – if you employ other people to help run your business, you owe them a special duty of care for their health, safety and well-being, the law says. In order for you to meet any claim an employee may make in this connection, you are legally obliged to have employers’ liability cover of at least £5 million;
  • professional liability – if you are in the business of offering professional advice, the good neighbour principle extends to your delivering that service based on the accuracy and standards of any other reasonable member of your profession. Failure to do so may leave you open to allegations of professional negligence and a potentially substantial claim in compensation. Members of some professions – such as accountants and lawyers – are legally obliged to hold such insurance cover;
  • product liability – any products that you sell or use in the provision of your services, need to be in fully working order, fit for purpose and free of defects. Even though the manufacturer of those products might be extending a warranty, you too have a duty to ensure that the goods are free of defects and fit for purpose. Product liability insurance helps defend you against claims when products fall short of these standards and cause injury or other loss or damage to one of your customers.

Who is liability insurance suitable for?

Who is liability insurance suitable for?

The insurance is suitable for – and may be a required part of doing business – for a wide range of people.

These include property owners, landlords (who have a particular duty of care towards their tenants), businesses providing goods and services (such as builders, roofers, window cleaners), and those in professional practice (accountants, architects etc).

Summary

Summary

As you can see, the different types of liability insurance each are designed to protect you, your business and, in some cases, your reputation. That is why it is so important to get the most appropriate cover for your enterprise.

Please feel free to get in touch with us at Specialist 4 should you need any clarification on the liability insurances required by your business, or to get a quote.

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