All businesses face their own unique set of risks and challenges, depending on the industry they work in, the number of employees they have on their payroll, the equipment they utilise, and the operating procedures instilled by the company. Typically, however, most insurance plans fall into six basic categories:
- General Liability
- Public Liability
- Product Liability
- Professional Liability
- Employers Liability
- Personal Liability
- Self-Employed and Miscellaneous Insurance Products
General Liability Insurance
General liability insurance is a comprehensive package or combination of the insurance types listed below. While generally cheaper than purchasing each insurance product individually, it may contain many options and bundled items that you find superfluous.
Public Liability Insurance
Public liability insurance protects your business against any lawsuit or claim made by your employees or the public due to a breach of negligence. Such an accident can occur both on and offsite, so long as the business is shown to be culpable in causing the injury or damages. If the business is covered by an public liability insurance policy, however, the insurer is responsible for all expenses, legal fees, and settlement costs. It is up to the insurance company to determine if it wants to fight the case or pay the requested damages.
Product Liability Insurance
Product liability protects your business in the instance of a product malfunction. Mechanical failures and manufacturing defects are common grounds for lawsuits by consumers. Certain industries who run the risk of damaging property or the environment via spills and hazardous pollutants may also seek insurance for product liability. Product liability, however, does not protect a business for selling a poorly designed product. Only errors in the manufacturing process are covered.
Professional Liability Insurance
Also referred to as professional indemnity insurance, this coverage safeguards consultants, lawyers, doctors, and financial advisers from claims of negligence. Given the subjective nature of advice and the complexities of these professions, its important to have some level of protection should a client feel they were advised poorly. This insurance is also popular with real estate agents, journalists, and IT consultants.
Employers Liability Insurance
Another hazard businesses face is the potential for a severe injury or illness to affect their employees. If this illness is found to be the cause of employer negligence, you will be held liable for medical treatment, legal fees, and compensation. An example of this would be industries that knowingly allowed their workers to handle asbestos fibres years after research has shown their link to pernicious forms of cancer. All businesses in the UK must have a bare minimum of £5 million of liability coverage for their employees.
Personal Liability Insurance
Various offences of a personal nature such as libel, slander, or copyright infringement fall under the category of Personal Liability Insurance. Often times when companies work together on a project they may have access to sensitive information. If that information as used maliciously or to advance one’s own business, that can be grounds for a lawsuit. False advertising claims also fall under the realm of personal liability insurance. If a customer feels they were not properly informed of the inherent dangers of a product, they may file a claim.
Self-Employed Liability Insurance
Given the smaller profit margins, lack of employees, and minimal use of equipment, a self-employed individual runs little risk of being sued, provided they are not offering consultation or advice. However, this does translate to much lower premiums, and opting for no insurance can expose you to losing your business from a single negligence claim. Given the specific needs of the self-employed, one option is to join a self-employed insurance network that pools together funds from similar businesses. Other options include contacting a provider and asking for a flexible coverage plan that is tailored to your individual requirements. Many insurers now offer a variety of options in addition to their standard coverage packages.