Related Posts with Thumbnails

Public liability insurance: the facts

If you are investing in a start-up or small business for the first time, you may be unfamiliar with the types of risks associated with running your business and what types of insurance could be taken out to protect you from any fallout from those risks. After all, most of us learn from experience, and if you’ve never had the misfortune of being sued or suffering a financial loss through natural disaster or theft you won’t have the hindsight to know what to do to protect yourself and your business from such things.
So think about the sorts of risk you might face when running your own business now. Your premises or equipment could be destroyed by fire or flood, or be stolen; you could be sued by a customer who slips on your wet shop floor; you could be sued by a customer after you carry out work that isn’t to their satisfaction or that causes damage to their property. Public liability insurance (PLI) is a sure way to protect yourself from suffering from the financial consequences that would follow from an act of negligence on your part or on the part of one of your employees, that has resulted in someone else being injured or having their property destroyed or damaged.
To take an example, if you are a builder and one of your workers fails to mix the cement in the correct proportions, causing the client’s new extension to collapse and damage their car and injure a passer-by, your client and the injured person are going to want to be compensated. If you can’t afford to pay all the related legal fees and compensation amounts involved, a court would order that you pay out of your own, private assets (e.g. by selling your house) or by slapping a CCJ against your name, making future credit and borrowing a near impossibility.
Public liability insurance is something that almost all large companies and businesses hold, but small businesses and start-ups should also put a public liability policy in place to protect themselves against the costs of a claim and to offer assurance to their clients that they are a reputable, responsible business. PLI protects you against claims arising from negligence that causes injury or damage to property at your place of business or within your clients’ premises, or out in public. There is no legal requirement to have PLI in place (unlike employers’ liability insurance, which is a legal requirement if you have anyone working for you) but it is advisable to seriously consider taking out a policy. Consider what the worst-case scenario could be for your business in terms of the level of compensation that might be sought and the level of associated legal bills. Then contrast that with the relatively small premium that you would have to pay to avert such a financial crisis.
Whether you work in construction, IT, a skilled trade or any other business that brings you into contact with members of the public (including customers, salesmen, repairmen etc.), then you should seek some quotes for public liability insurance as soon as possible.


Post a Comment