It provides cover against claims made by members of the public who have suffered injury
(including to their property) in connection with the business, for example:
- A window cleaner who has left their ladder unattended and a passer-by is injured by it, or damages the glass of a window they're cleaning
- A cleaner who forgot to put a 'wet floor' sign out after mopping the floor and someone slips and injures themselves
If someone is severely injured in connection with a business, they could be entitled to claim a lot of money, and if you don't have the right cover in place, that claim could have to come out of your pocket, putting your livelihood on the line.
Compensation resulting from claims can include loss of earnings, future loss of earnings, damages that are awarded to the claimant
, together with legal costs in defending against the claim
, and also the claimant's legal costs
that you would incur if you are found to be at fault.
It's good practice to have sufficient cover in place to protect yourself and your business against both claims of negligence which resulted in injury to a member of the public or damage to property.