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Do I need liability insurance?

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There are many things that could go wrong in your business and threaten your livelihood, but by protecting yourself with liability insurance you can make sure that you're covered against a range of eventualities.

small business owners

Public liability insurance vs employer’s liability insurance

It's important to understand the differences between types of liability insurance you can take out.

Public liability insurance refers to insurance that will cover you and your business for any inconvenience you may cause a customer, such as through damage or loss of goods and damage to their property while work is being carried out.

Conversely, employer's liability insurance protects the people who work for you, ensuring you are able to pay damages if an employee becomes injured while carrying out their work.

Why are these types of insurance desirable?

A woman holding a loaf of bread in a small deli

Both types of liability insurance can be considered essential for safeguarding your business and ensuring you don't have to pay significant amounts for damages, but it's not just about the money involved: by demonstrating to workers and customers that you have their safety and convenience in mind, you can develop trust and a stronger working relationship, as well as being able to provide documentation in cases where liability insurance is a legal requirement.

It's a good idea to find out as much as you can about liability insurance and the requirements of the sector you work in before taking out a policy, as various levels of cover can be required depending on the type of work you carry out.

Public liability claims tend to be expensive, meaning cover of up to at least £1 million can be considered a minimum, but if you work in areas such as the public sector you could be required to prove that your business is covered upwards of £5 million for damages. Employer's liability is typically combined with public liability insurance to provide upwards of £10 million cover for everyone in your business - bearing in mind that even top-level company directors are classed as employees under the policy.

Employer's liability insurance is more than just a good idea; in many cases, even if you only have a single employee under you, it's required by law. If your business is not insured and one of your employees files an injury claim, the costs could soon add up, as you may even have to pay legal fees if your case is not successful. Don't risk working yourself out of business to pay debts - take out a comprehensive liability insurance policy to provide effective cover throughout the working day.

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Public liability insurance

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