3 ways your business can avoid being liable for damages

Written by Callum Watkins, Digital Marketing Executive at 1st Choice Insurance

Let’s face it, as business owners, there are situations that cause us all headaches. Whilst business can prove itself to be lucrative and rewarding, there are situations we hope and pray we avoid, and no, we are not talking about the printer that always runs out of ink during peak time. We are talking about your business liabilities.

Accidents, injuries, or even death are obviously serious, costly and can close a business overnight. This blog will outline the three key liability insurance policies that all businesses must consider ensuring they are protected. We will outline the benefits of each policy, using some real examples of why the insurance is needed.

Public Liability Insurance

Public liability insurance is needed if members of the public visit your premises. This could be a shop with public customers, right through to a library, where members of the public may visit. Public liability insurance protects businesses that are found to be legally responsible for third-party personal injury or property damage cases.

Let’s say a member of the public trips down the stairs and breaks their leg. If the case finds that this could have been avoided, maybe by using signs or keeping the stairs clean and tidy, you could be liable to pay damages. These damages can really mount up if you consider compensation costs and loss of earnings. In short, public liability will save you business a fortune if any customers or visitors are hurt on your premises, regardless of its severity.

Employers Liability Insurance

Employers liability insurance is a policy designed to protect employers from financial losses that can occur if an employee is injured and becomes ill because of performing their job. Employers liability is required by anyone who is running a business and employing staff. In fact, employer’s liability insurance is a legal requirement for anyone in the UK who is trading as a limited company, even if they employ a single member of staff.

Let’s say you run a small business that sells mobility equipment. Upon getting some stock from the warehouse, an employee is injured when heavy stock falls because of incorrect shelving of products. Heavy stock could cause serious injury, leaving an employee unable to work. Employers liability would minimise the financial outlay a company has to make.

In fact, employer’s liability is vital to cover the costs of any employee injury where your business may be at fault in the event of a successful claim.

Product Liability Insurance

Product liability insurance protects against claims for personal injury or property damage caused by a product your business designed, sold or supplied. It can cover legal fees and compensation costs if someone sues you. This applies even if you do make the product and are in fact simply a wholesaler or reseller.

Probably the most obvious example of where product liability insurance is required would be food products and children toys. Food products can easily be contaminated and make numerous customers ill, likewise, a children’s toy can potentially be broken and swallowed, providing a major choking hazard.

In both cases, if you are a found liable because of a faulty or defunct product, and it results in serious injury or even death, your business could be liable for legal costs. These costs can be huge. Just look at the recent $4.7 billion pay-out by Johnson & Johnson!

Make sure you are covered!

Remember, all business who employ need employer’s liability insurance, so that is a must. As for public and product liability, you need to consider your business and decide whether these policies would protect you. If you need more advice, always feel free to contact 1st Choice Insurance.